Jul 27, us japan cooperation on multilateral problems

I MSNOXANDUI,I EOR

!IR. I]ENIY A.

TISSINCER

subject: submissicn of Response to NSC rlmo dated .rult, 12, 1913 NSSM 172 - Jepen Attached is our response to your request for a sleciaI studl on the question of Us-Japan cooperation on rultilateral problems of hutual concern. The study has been concurled in by m$bers of the Interdepaltnental Group fo!

East Asia and the Pacific v;lich leviesed tne

the follos:ng ag.nci.s p.rLicip.Led iDepartnent of State Departhent of the Treasury Departhent of Comerce Departnent of Deferse Ams Control and Disamdent Agency conn.i I on intFrnari6h U.

S. Infomation

Agency

National security cou!.il Staff

Richaid I-. s.eider Chaima.r .C noc Group

for

Response

to

dated July

NSC

l2i

mao

1913

Nssrl 172

-

-

of a healthy, evolving zelationship rlth ilapan as ou! najo! ally in asia is vitaf to the long range iEtelests of the United States. fhe stlergth of that tie aDat the coDfidence vith which it is legalded by each pariy ffi1l signtftcantly affe.t the achtevement of othe! u.s. objectives ir the area aDd is essential to the fulule peace and stability ot the Asia-Pacific region, In the past, bilatelal aspects of us-,rapaD politicalr econonic and military coopelation have received primalt attention- sirce 1945 our fund ental iDterests in ,Jalan have been to ensu.e that Japanese influence iD Asia is constructive and benign. Nosr horever, Japanrs The halntenance

enomous economic !oee! and technoloqi.al elcellence, and

its potential for lo1ittca1 tnfluence and rilitaly pde!, project thoEe inteleBi6 on a global scaIe. of the rclldrs gleat pose! wilt glow so fast e.onomicatly over the next decade aa .lapan and none 1s 1e6s certaln

of its lightful position in a sllti-po1ar wolld no! of the role 1t wishes to play.

Ine specific rultitatelal i.sues ex ined belo{ constitute a chaueaqins !â‚Źw dinelsior in ou! lelations

with ,rapan as vetl as an opportuEity for coistfrctive and beneficial Us-Japan cooperation.

their obllgation, as a majo! ecorosic power, to assist senerously in the leconstluctio! and lehabltltatlon of Indo-China. At the sanâ‚Ź tire, poticy .rritchee by lnfluential third courtries su.h .nd Incleasitrg plessure fton tanoi and its donestic slTpathlze!6. have conbined to force the GoJ to frove toward lecognition ot Eanoi.

The GOJ is prepareil to increase ite preEent noilest Ievel of asâ‚Źlstance to South Vietnam, but, for domestic political reasors, it hay be reluctant !o do so until the plans of other coutrieE. iDcludiDg the U.s.. ale hore tutly defineC and some progless is nade itr establishlag relatlons aith the North. on t.l1e other hand, as a result of secretalt Rcaelsr apploach to The Japarese ackndleCge

Ohira, they have takeD a more positive position and will probably nake a coDcrete lroposai fo! ald to saslc O.S. and Japanese hterest6 -- Establisbhent of peace and stabilfty tnrougholt

-- Creatio! of an opttnal climate fo! effectlve use ol available lesoulces for leconslluction aDd recovely and econofri. develo!fient.

s. and.raeanese oblectives -- Temiiation of hostillties by implementation of ceasefite anal political agreemelts thloughout Basic u.

effective rehabilitatloo and recovely plogrd throughout hdo{hiDar eveltla1ly includihg Noltn viernm, adainistered on either a mlltilatelal or bilatelal basiE, in compltaD.e eitn the vietnam aqleenert, -- lncoragement of narlrm Japanese eco!@ic assistance, bealing in nind the need to avoid Japanese economic donination of post-war rndo-chlna to the detlinent of U.S. comerciat interesre. (U.S.)

--

AD

Presidert Dark of south xolea annouDced a seven-point foleign pollcy initiative shtch leplesent6 a constluctive step toward mairtainirg peace on the Ob June 23

xorean

Peninsula.

it acln@tedges

a

de facto tro-riorea situation and provides rhe basls fo! a flelible lositioh o! the !,N plesence ln Xolea and on

considelation of the xolean itd iD the u.N. General Assqnbly, iDcluding slfru1taneous adhisslob of botn IGleas. The initial North Kolean respcnse }as leen negative, but se do not believe ,e have healit thetr

final lcdt palticulalIy wltn regald to adsission to

U.s. and Japalese Yiews baEically coinciCe on (o!ea pofic! and ilapanese reactton to the Park ar,nounce-

lert has

been

favolabIe.

The ilapanese attach

palticular

ihportance to close coodination and .ohsultation

bet een thaselves, the U.s. and the EOL legalding U.N. strategy and tactics. ne have !!ged t!â‚Ź JepareEe to move s1or1y in broadentng tneir relations uith North Kolea at a tire ,nen ire hole to encouiage a favo!able comunist leaction to thE Soutlr kolean initiative.

The issues of JapaDese inve.thent 1n Solti Xorear the lo1e of {r.s. bases in Japa! t! the defense of south xolea and the future of the u.N. comand ale also of con6iderable interest to the Japarese.

Baslc U.s. and ,Iapanâ‚Źse Interests

-- Continued

peace and

stability on tie golear

Baeic U.S. and Japanese Objectives

-- lncourage a sEhi-pemanert tro-(orea -- lncoulage the lresent discus6tons letween North and south xolea,

of l].N. mehbershi! by both xoreas sithout prejldice to evestual leuification; -- Improve relations vith North Xolea at a pace consistent sith imploved comunist state relations kith --

Encoulage acceptance

Soltn i(o!ea. (The Japanese hay {ish !o nove

--

contlDue assurances

defense and

leitelate the

of

suFport

importahce

fo!

more

Sorth (o!ea,s

of u.s. bases tn

,lapa! tn defense planninq (u.s.),

-- Avotil courses of conduct vrhicb could lesull in inflffiatory or aestaliI1zins incidents, -- Cooperate to naintein an atnosphele colducive to continued u.s. and Japalese llvestrent and ec6n@lc -- Coopelate in seeLing increased understahding by the great powers ot hou each percelves the situation in norea and of their responsibilities and comiEnents to thelr lespective a11ies, -- Continue to coordinate closely on I].N. stlategy srEExrAli rcoNo.rtrc Dxvr,toprMtT

Ih 1956 the soviet Uni@ and.rapan ,,nomalizedt' thei! relationsiip by reans of a jotnt declaration -lot a peace treatt. It ,as not urtil Janlaly 1972 that both countlies aqleed that negotiatiols on a peace tleaty shoula begh. Pri$e uinister Talala's visit to l{osc@ ne:t octobe! could lesuli in sore fulrher proglessr althouqh sorlet lefu.a1 to accotuodate Japanese atenands for the leturn of the Northern rellitories --

islands r.orth and east of toltaido neld by tie Soviets srnce the end of uorld Uar II -- coLtd lemain a Despite the Ce1ays in tleaty negotlations, the soviets have alternately elcoufaged and diEccuiaged

larticipation in the exploitation of Slbelian natural the past ten yeals.

The Soviet UDion aDd Japan are nov, engageat in serious dl6cussions of 1a!qe-6ca1e siberian proje.ts, incluating lunber and uood ciip productio!, expansion ot port facilities, atrd develoFment of oilr gas ald Jalanese

soviet6, short of develophent capitat, aplear increasingly r111in9 to pemit the,rapanese to assist in financi.g siberian develop.ert, soviet reluctance thus far to pemit verificatioD of rhe econohic feaslbility of these prcjects is rhe najo! rehairing The

to fulthe! lrogless. trapan,s lntelest reflects ne! rising demand !o! enelgy and the obvioug need !o diversify and expand the solrces theleof. the Jalanese are particulalIy anxionsr to! politi.at and econohlc reaso.s/ to ensure that Anelican inrelests will atso palticipate. Sihilarly, ,e are coicerned that Japanese iDtelests be inctuaed at an ea!1y staqe ob6tacl.e

in any projected Us-Soviet devetophent p1ans. h addition to the â‚Ź.obomlc berefits (ht.h vould acclue from the input ot Japanese capltat and tecbnical tnow-how into the6e plojects, ou! joint laltlcipation tith the ,rapaDese in such ventures woula have inpoltant pofltical. significance iD tems o, emerging relatioDships tn last Asfa, Joint laltictpation in siberlan developretrt projects r,ould selve to encollaqe the kind of coopelative lelatioDship on a rorldside baEis which ,e are tlying to develop vith the Japanese.

Oh t.l1e othe! hand. a failule to con.utt closely with the Japanese o! these plojects would result in fli.tions Hhich could unde&ine ou! ovelalI effolts to achieve a coo!,eiative relationshlp ln energy mattels.

Basic o.s. and irapalese Intelests -- Actire participation th the economic developnent of siltreriaD leBources, -- Ilcreased economic interaction and tlade riti Basic U.S. ahd JaDanese obie.tives

-- Strong govelmental suppolt and encoulagmenr of econmically viable Siberian developnent ventules. palticulally in the energ] fielat; -- Joint US-Japanese parti.iFation iD indiviaually applovec projects'

-- Continuing close consultation and coopelation .l toLh gove.d.e, r .rC .omar. .d' 'erels.

ECO!-Or,irC COOPEiATIoN

Although thele hate been rany .uggestions a6 to

constitute Asia-Pacific coopelatton, the nost llausib1e night be sone locse aEso.tatloa of the U,s., Japanr calada ard Austtalia sith othe! nation. palticilating as their interestB ale 1nvo1red.

Distaocer the diversity of culture6 and econohies, and the overirhelmils impoltalce of b:i1atelal ties to majo! indlstrial partner6, have thu€ far militated against the develolnent of any significant Paciflc Basin co.sciousness o! alea-side eco,oric cooperatioh. what might

naEeer qoverm€ntat effolts ASPAC), only in the piivate secto!

mough there have lreen

tn the leqion (ASEAN, (cnan!€!s of comerce, private bustness orsani2ations, etc.), lare thele been even modeBt move€ tora.d legional olganizational actilities. There is ltttle lilelihooo 01 any chanq€ jn rris sirLatjon Eince

the United States an.t Japa! {111 continue ro doninate the legion's expolt nallets and BoDlces ot law haterials while reaining the plincipal sources ot developnent assistance both on a bitateral basis enit through

inteinatt.nal tnstttrtion.-

a conceDtration of Japanese comercial activity and econonic assietece in the Asia-Pacific reglon ca! be expectea to contirue. Hoaever, the Japanese ale arare of tne ddgers of allealing to domilate tlre lesioD aDd ale beconins sorewhat mole reslonsiv€ to local aud latiohal sensitivilies. By conti&ing efforts to inplove thei! inage 1! comelciat rransactton6, by chanrelins aid thlough irtelnational olganizations such as tle Asian Developnert Bant and tiy li!€lalizirs tlei! stil1 retatively halil aic rems, the Japan€se Nitl be fqltheling econonic cooperation within the region.

efforts in the region are supportive of ou! 06. li@ever, it is doultful it there is aly sizeable body of opioioa in Japan or aDtpface else iD the reqio! ,!icn favors tlying to approach its p!ob]4s throuqh a! olganizalion including slch $tdeIy sepalated and politlcally di.parate renbels as Japan's modeet

xorea and Chile.

Basic u.S. and Japanese Interesi6

--

Encourage increased econ@ic iDtelaction

of the AEia-paciflc elea whele thele erist clealIy discerllb1o mutual Iretreen and among the nationE

u.s. ard Japanese obiectlves -- coopelate closely vitn individual xegicnal govelments to avoid unwelcone donination of iheir Baeic

national eco.omies, -- conlinue the plesent trend toward llovisio! .f 6c.nonic a.sistancâ‚Ź on (A!I,AI]TIC PAp.TNIRSI] I P ) DICI,APAI]ON The Japahese see tteir relstions Hith Iulope largely tn trade and ftonetary temsr vttil lelatively lees political or sâ‚Źculit], itrput. Dr. xisstngerls atlantic charte! sleech and Japalls irclusion in it caught tbe ilapane6e !y Elrpriee, althoush the official cOJ ,esponse Eas plonpt and positive. The irapanese ao not ,ant to be exciuded fr.m the lomutation of the Declalation ana are prepared to luy into its coD.tusions wheD they kDd what the price will be. r,o'ite actno{1edglDg the lite!-relationship of security and econofti. affatlst the Japanese lecoghize that most econonic principles have globa1 lather thaD legional applicabitity and ronater hos the beu U.s. approach

will squale rrith oh-going discussione of tho6e problds in existing iltelnatioral lnstitutiorB. They hope this qillingness to subsclibe to secDllty principles si(ilar to those contained ln the v.N. chaltef and the os-JapaD lreaty of Mutual

cooperation and Secu!1tt ,i11 plovide a basls for

furthe! palticipation in llrat aspect of tie exelcise. we should p1a! to provide tie Japanese vtth a draft DeclaratioD Do later than Auqust 31 to a11o, time fo! effectlve exchalge of vievB prior to Tanaka's departure oD his westelh !!ro!ea. tllp xov planned for Easic u.S. and .ralanese Interests

-- Gleate! Jalanese political interactio ith Iulope and ihe U.S. on a hultilateral ha6lst -- Eroader Eurolean foc!6 on 91o!a1 rather than zegioial eco.onic lloblems;

-- rime! acceptalce of tne necessit! ot deferse lelationshlls as contlibutinq to the plogless of deiente. sasic u.s. and Japanese oblectives -- Incluslon ot Japan in the early fomulation ot any Us-Europe oriented declaration of comon plincip1e6 -- Fult lecogDItion of Japanis special position Ftth legald to seculity matter6. .rapan's feelings

of isolatto!

and

ins.cuiitl

their zenit! khele enelgy lesolrces are concelnedr and tbere i5 leihals a greater chance of divelgence and nislndelstanding bet\reen o!! two countries on this reech

72

issue tha, on any othe!. It night not be 9oin9 too far to chalacterize iapanrâ‚Ź energy requirements as the sing1e most

irlortant Cetemirant of her foreign

policy fo! the future.

Japa, ls alnost entirely dependent on oil inports fo! ils energy, a situation which has histolically nade the cOJ extlse1y selsitive to questiors of oil sollce and security. The Japanese are culrently trying to lalL the llne bet een (1) establishing diie.t cornercial relationships kith producer states - in the hole the! non-antagonistlc policies plus Japanese dire.t investfrents will assule then of a continutng supply and (2) their need to stay or: good tems ith the najor international cohpanies and their goverment6 (min1y the ts) that supply most of their oiI. rre have talked (ith the Japanese alrout the irporta!.e of cooperation and coordination ahonq the najo! consming nations sc as to avoic wasteful aba co6tly conpetition for available oi1. untle the Japanese may be ready to cooperate ir an effective international aftaEgenent shich appears to profri6e then a, asslred suplIyr they ale equally plepaled to act indepebdently if lheir interesis appear lik.ty to !e suboldinated ro the polltrcat 6rd econori. pol i.'es o! othe-s.

several sulstantial â‚Źnelgy plojects invotvlns ,rapanese-us joint exFloitation of siberian gas and oit have been under discussion {ith Japanese intelests and tbe GOJ. The ,rapanese have been anxlous to ,ork with Anelican interests in these p.ojects aDd are neflous about any possible us-ussR energy arrangehents which

night exclude Japa! flon areas j.D ehich it

ha6 an

E6tahlishneht of a us-Japan NolkiDg gloup to study

the feasibility of .onstructlng a joint ulanim euicbnent plant i! the U.S. nas agleed uFon last yea! ln Saraii. rhe recently fomed Jalanese EnllcineD! Sllvey comlttee has held discu66ions \rith A.!C and U.s,

lnillstly repre6entatives, ard !!og!eB6 has been nade in Degotiations leading to a Frâ‚Ź-lnvestnent 5u!vey.

Easic U.s. and tlapanese Ibtelests -- ?eace and stability 1n the Uiddte East, -- An adeq@te and assuled supply ot iEpolted Petrole@ at reasonable cost, -- Avoidan.e of unlecessaly and costly cohpetltion -- Developnent of altelnative elelgy so!!.es more efficient use of exi6ting soulces.

and

u.s. and ralanese obiectives -- Close coordination betvreen U.s. and Japalese fihs participating in related ventules, particularly i, tne USSR, but also in other lroduce! states, to avotd being played-off against ea.h other in negotiations, -- clo6e US-Japa! cooperatlon i! the Eigh Level Gtou! of the OECD Oi1 comitlee; -- closo cooleratio! tn enelgy-lelated R&D Basic

result of noderate e*port glorth and sharply tncleased islorts, the ,rapanese tlade surplus, ovela1f ard with the Us, for the first hatf of ]973 i6 greatly reduced cohpaled ro the sde period or rl-e plerious yea!. Eoleign excharge leselves have also been significantty reduced. The Japanese point trith gleat plide to ihe6e lesults, rhi.h they believe to be the ploduct of thei! lecent policy a.tions (levaluatiotrs totalling 35t, tariff cuts, quota and investrent liberalization), auit predict that this bette! balance rilt .ontinue for sone tlhe to cone. The coJ hairtaing tlat ii has gone a long qay touara fulfilling its duties as a surplus country aid that ten6ton with other countries ove! tlade Fattels sh.uld be greatly As a

!ea!.ed. The Japanese !ee1 that fulthe! gains are n@ largely u! to foleiqn exportels, wlro should make gleate! effolts to sell in irapar. Irposltion of export coltrols by the us (priiali]y on aqricultula1 ploduct6) is a mtter of corceh to the Japanese i,!o see slch cortrols a6 a serious ihpedlren! to continued lapid improvement in the bilatelal trade balance. as eell eE a potentially serious il@estic !olitica1 problen. $e have expressed appreciation for actions tahen b1, the co.l and Fub1lcly relconed the improvaâ‚Źnt in the trade ba1an.e. we are conceined horeve! that the pregert ihDrovselt Eay, in pa!t, reflect t6porary tectols and have ulgea the Japanese to continue their efforts to achieve an external balaDce fifr1y established on a long-ten bast6-

that nultilatelaI tlaae Degotiations covering both industlial ahd agr:cultural products 6hould beg:n this year. and that the negotiatiols shoutd incluae taliffs, non-tariff ba!!ie!s, aDa the fomulation of a nultil.ateraf safeguald 6y5tff, The plincilal objectlves of tne negotiations .hou1d be subslantial liberalizatioD of vorld tlade and ref6m of th.

The Onited States and irapan aglee

16

iDternational traditrq system, The united states and Japan aglee on the need to hove torard a "one uorlil" economy tbrough cooperati!'e action on a wide ranqe of economic lrohlehs. fie have stles.ed the trecessity to adapt alrangement6 coveriig tbe nonetaly syst@. tlaae. lNesttrent and enelgy 5o as to devetop a durable systeh for the conauct of international e.onofri. affairs in an interdeperdelt eolld in vhich ro one natlcn holds a doninant econohic

Io dater the irapanese, although playing a lelatively passive ro1e, have cpposed the rajo! elesents of the U.s. plan for international rcnetaly lefom. we should eake a speclal effolt to pelsuace the Japanese to suppolt at tea.t hajo! eldents of our plolosals.

Tbey ale designed to be equitable and effective ir tems of leeping the entile eonetary syslen in balance and ale not aimed at any one country or qloup of coqntries. ,rhe ploposals are designed to plevent the recdre^ce of the 6eriou5 iftbalances {hich caused the coflapse of the ola nonetaly system. ald to ledlce the danqe! of sidespread tlade lestlictions. Thu6. they sholld selve Japan s interestE. '!

Beslc U.s. and .rapanese Inteteâ‚Źts

-- Ref.m of present international noDetary antt trading syst4s to ftore acculate1y leflect changes 1! vorlat ecoEonic relationsnips' -- stlengtne. ana maintain the present close and mutually heneticial bilatâ‚Źra1 trade ties ahile seellng to achieve a nore balancea and broadly llaBed econonic lerallonshiP.

-- cooperate closely in tle conte*! of ulcohlng fru1tl1ateraI trade and nonetaly talks to en6ule that hutual intelests are protected and to encolrage establishnent ol a "one sorld" ecobonl. olderr -- continue effof,ts to leduce the present li1atelal tlade inbalance to a more manageable 5i2e uithin a leasolalle Feriod of timei -- seek to evoid inpositron of restrtctlve sbolttem traile control measures: -- Inclease O.S. expolts of ranlfactuled ptoductsr -- n1o!k togetier for the eltrinatton of rational policies ard regulations coveling i.ternational capital floqs that Clstolt trade and capital norenehts.