Oct 24, econ tensions

lt

?i

G!IE!.&!

ea

1!&t rs iot to* !...!t l.tt., .!d t!. a.lo..a .p...[ ,or !t...,t.d r.d @!ti r. F.&t.r. oa t!. J.p.!-C.lla.rd. r.rod.tlo! t! Nr8oF, J.F..

A. .luy., I v.h. t.u oglrtd. ll3tlt.ad .ar.. tt.t w. a!.t .yeta @c..r.!, cda,olr.n.nr b.tr..n olr ho coutlt.r .v.r !1.1!i ,.pta... t r.la. i!v..rB.al ata .@!.tttlo! tc, ...r.! rtnr.l r..ou..!, I l.l!.v. rot! r.dv. !â&#x201A;Źltrclp.tton r! .!.h t!@p. .. r!. adrt.ory Co@.tl d ,!p.!-U,S. Ecomhi< R.l.doa. ea th. J.!E-C.U{o&tr r..o.i.rt.a h.. do.. D..L to.!.rr U.S. ofn.t l. to.o.i 1..s., C.r.t!r .rp].Btt.E rttl th. Jrp.!... h b.iL pulltc .!d pilv.t. c!.e.!. etu, l.E .6.! L.l, i. d.v.Lp th. .oop.r.ltr. rplrd.t B.d.d t. a.A!. ar 6nt@l r!t.r..rt in t6.r. .r..r.

I

.p9r..r.r. yor! t .pt S D. l!lo6.il o! tit. dtt r. tr:r

P.i..

a!

tLlra.r -4..Li.rt ta lL. P...td.* ,or &a.rud.Bl !6!et. Aanb.

Mr.

C. W,

M-

Robl!..a

{ l!h.c.r Co!E.El16r O.. rarlttl Pl.z.

$! fru.lr.!.

C.ltloEL

9,rur

FLPri..:itlop:10/19/ ?2 ..'s: Mes!.8. Flanig.nr HlDto!, Prt../Clton,

r's-

(, I MARCONA CORPORATION

Duins {D Eceht dlscusston tn {ashinsto!,

I

s/a33

ex!&ssed flre

vie{ thet t]1eie {ere as seas of confxontatton rhich :6urc dew€I.! rith Jelan ovea t]ja coh1ng dccade. Altnouel the curcnt

tht6 declinins over the next fsr yBars as a Il&tver, thele ae stuce of lrrttatton bet e

ffi

evoidns vhich 'ibattteeroundst befole 1980: neE tssues

I Dticilate vill

develop tnto naior

.. The JalaeBe xi11 nNe essressirelyj dlloJtne anit eqnit inveshenl3 tl:eir sul)tus l1]eJ {i11 do this sadtibg nole throueh@t the rc{d. eene!@s lendins teme e.i eccelti.s a r6e? nte of retun on equiw jnresr2r€nt D woJS which , l have a Be'1ous i@act on !. s. and Eu@eo financia.r md conr*clat tnte!€ste. r'hiE r-1I1 cxeate diff:cult !.oblms ,or @r cotlanieo sd narls o?elatins ahload aDit nanr ea€n create Eei@B difficuliies i, ou! @ d@estic e.oDoqr! if tne Japoege !1ay W the b. As the !, s. b,"c@es increesinzry defictent ir mtuIal lesuces--!etldla!1t' enelcy rcs@ce5--there dl-1 ie d expandi.€ cchfli.t xith ,_ap$ese dtlcilate urat re stll fa.e lddl.uIar.ly 3edor3 probfotrs 1n M effo*s ir obtain iEressins murries of oi] and €6s Sertds lrot1fts a1ll aeye1o! ir Soih of these lake ea?lv stels lre"ttrrne co 'rortoticn t]]rrah dlticitaiiie tx8 isses ed dcre1+ixg coo!.Etive ar]t@ch altt

'

sre! of Jaldesd assoctatid :eciing in lraeoJa. ir

tne

,Japane3e lrolld deas

urese n.v

I

leaderg ot rnc Jalo-ca1i,.ornia disclssed txe cxercine stn.tuc cted the dereloDnent of her econmtc srdt}.

since]e1y,

('1...

(

1,11e

Jar:r-caliloni.r xs:ociriio. :.:ietlnt I*oya, Jnl,ar selieli!.r 23, ).t72

tJ,1}l\1J-U,s.

lllruTlollJlilm IN OII 1170,, ! \r)i.h ha. bc.r djsirinuted to atl mrticlrarls tn adldrcc. I would liltc to clat.rate

!r?cr

t]]aae tn tlre J.!a.ese

rirnclural c).ng.s tuLins i:race haae a ,!nd.):enial jhlacr on

on ny baslc

u.s.-Ja!d rcletionslrirs i, the tutu.. rher. is in tle Bocial scicn.es mch the sue prlnci?le of ln.*ia 1. tlE lhysical sct.nccs. Io4es orce eet ii notlol continu. .t

Ure

6de s!3ed uii in tle see directton, unlcss act.d ulon by coDto.

forcer.

This phendenon has b€€n aploeni

ir oD lerceltions

leAardile

iI€ ftlue

.ourse of tlre Ja1)mese econow drich h.ve .onttNed as a

Drojection

ol tne

facts,

r96o,s.

There has )cen

llttIe

iecogltt::oD

ts reflcctcd in the wr,t that tne exoqlne st?ensth of ihe doh.sitc o.on5ry of Jale is self-leirforcina ard vi)I Thie perceptton Ga!

contimc at ar a.celeral:tne !ace.

thts njs.oncc)'tion vas I)erlErs nost d,turatized and .e!tat!1y test Dublicized by the V.S. futuroloelstJ licn0an Elrerging Ja?&e3.

xalr, ir })is boot llre

snperslltc: cha11enlc and Reslo.se.

lEs pibri3led.,r.ly in

1.970

I inrediote:x slole oui sllonglJ dn

jclu ssainst trc viev6 hc c)Tr.rsed. r did so not o)ny l)ccals.r r tlrorsli txesc viers lcre Do.g, [nt n.rc irp.rls!,,1y I felr th.t txcy verc l]oilg to rre cxtrDye]y laIJu1 r. futuc Jar!n-u,s. lelalrJoristrils. lDbl

In

Japan

nemd

of

Kahn

{as Fanctillcd

because he s.cn

ii to recoriir-

.rhe

lotictes and..couasc 1rr. J:ilanesc to.otriiruc lJheir drive ror e1otal status on.a. eco.onic basis. Ie offcred EAssruelce of the hlne or a !ota1 dedjcation to this n.tio.al carse th d!fte of thc najor lerloEl sacrtric€r jnvolved. This rcs!.Ilcd tn a costly dcl.y tn soundness

Japanrs

the necessary reanlraisal. and rcdircctioDing of Jalo,s socio-c..r.ntc

lolictcs to hamorlze -lth rhe ID the united states

rea1

sd tn t]re

clea&a m i@se

rbrtd d tr is !o,

rrrD.orea. comuniq,,

evo1vtno.

}Iemd rahn's

book

ooliath ctridine acloss our lahds loayiiE

of conc€r! aDd faar rhicn ras r,raDslataA into a nev dd serious !o1ttl(a1 tlnst, It encruaged thc d€velolDert of liot.ctionisn lot onlJ in thc United States bni

i! the rxroled cmuni!. a! welt.

nhereas neman (anD vas

these vjdrs,

san.tiftad tn

Jepan

I m confident that urrinat.ly

,he! he filst elAless.d tre

vil1be

seen

x@ 1ct's look at the fects taleD !1ace stnce

- trre ijportot deyelolsents llich nare thc nid-aDis - vlich xit1 ccrrainly inth.-nce Ure

future couse of Jalanis econonlc developnent:

ts a sroii.s labor stort.se vljch li1f, Ie accentlat€d ty tl,e tncraiiha dcrdd for :ho*er

There

in r.oler

-3-

v.rk

2.

lrours ata a

snorte \$!l.ieel..

oi eii]y acquirec tecbr.I.5 {htclr '!ve $e!t, olrr Jtrlnn durins tle ,O's ad 60'. ir reccdln6 raridlY. nDtlre? !rolr.s3 lD this area Elr "r' .losely para1l.l t\c rote of riccl..loeical i&ac. t,

The

tid&l

the l,'.s. and in tlr. Ibopea! Corn.ltv.

1. t rapid dcicrtoEtion 1n eNtroroientat corditions ls a fact. It is .rso a tact ihat ftc puhlic h* necoEe acalclY arare of lo1luttc! ud its co3ts in r-cms of besltlt ard !er6ora1 discdfort.

!. ftere rs a sreat need for dcc.lcrltine investlent tn soclal tnf}astncture. Tl]e llblic hae mt odv leco|:nttca tlis tut vjll denan{l jncr€asins €brhasis o, the cons-lrdcator or hads, sclroo1s, recreatiolxl Ia.llltieB, etc. ,. In botlr tlre U.S. dd i! tlre itr.re.n Comuhitv it is !rctectionift ts tn the saadle od txere v1lr r. jn''.asi's r':ls!dc. o .p& 3 Do es.j a aprarent txal

6.

Jaran lras

Featly i.crcased tts forciEh

exchane€ balance

$16}tllior end sttll S"ovirs, tt ts not o,lv to thc eorernrctrt a budch }nt a ?, Thele is increasths recozaition of @ n,lcn'rtns volfadd. enera!/ crisis vlich rill lrave u esleclnllv sie.iftc.rt thpact on Jalen, n€ futue sxortase of eneaev - lsrticddrly j! lN su1fiLr foms - vjll r€strl.t rlc rate of dd at

ovc!

J.lanesc tndustrisr erd"'ih.

-l!

I telicvc tlat e)} of ns e..elt thc.e rr dcvclopicfts tnat ldU 'i11 lrEve sdo iryact o! tt! i\turc relario.slri}e rreirccn J3ia. md flr. 0.s, mat ore tle conseqnel.cs thot c$ bc arti.i!a1,.r1 i! llte irjrcn).dtaro

1.

rtlst dd

ledral]s noat hasicr

lubIle ettitnd€s v,ith.a refer to a3 ripcollcii

I anttctletc

I s.! r rulia c]]aije in

er.oqinil dirc.c.: rrelr:een

rhat r

"in(lu.tly', inierc.ts.

rcatrring tn rxo coresjon tlrnt las hla LoS.'h.- ,h" ,e-!o, 1'-...'' maic,r oI 1.. 1tr.. ., -or .., a

oi daaic.Jlo! dni of th. vi[tuLness to ra]re persoEl 8lcliti.es lor mtioDal ccor.mlc €;di4tr goels nessued in quantit:tili teme. Thi.:iu en.ouace a s@}-scarchins tor n.v vcluor, r.Ile4t!.c jn d irpo.rant vey older cdtural !Elu.s, $iq. ,tU be a srorirs ill.Iest of the

in

senre

loruras ro! enrutis lroxress iD qu"lttattve instead of qrahiitativ€ tehs as tu re rasi t enLy yeEs. netr

This

rill nrhA a lolarizatr:o! of attitudes wittr a g$(inA

.onfroDtalion bct!..n vartous eiouls

(e) ftere tiiu

be

rithin

u ex-idsiJ..f .olftrcls

u)e Jaldese

trer'eer t&bo!

sd naasen.nt vith ln4.e.si.g lressuc ror sbort.r hours and rietl.l !rV. lrc !r11 Fee a le.scnJhE of rh. iiiantificaticn ol 1,lr3 i.rr:.r ril,h Llr..orn:rrris over.]l comorcia! .nd flnr.lar

G.e.ls.

-r-

(b) flrc inc+ic.t to (ro?

ir, JlrlD !i11 contid:e

an.l ]Jecoie

mre

ahcrd shost 2r rilrion }corl. ars..iarr,r vj+) consw3r cr.ups ilnct n:vc d.r.Ior\:,i rra,rtly. T.e lublic vi11 t n( lrcssarc .r Fi.in3 plicies ixd qnelity

slsndards

.har{.r in t}u tnaftional md inef?icient .bf,:r.1s ol di.rrinniion.

I erovi.s entlusiaei

foa co.) cratiye! !111

tcl!

.ccc1â&#x201A;Źrate tnis trend.

(c)

,i11 te a eio tDg .onftontatto! Ietnren the public ana inaustry oler p.rlrl1on st:r&.ds. Lcst.laThere

tion !it1 hecdie nore rcsiriciir= vit! court3 ararding

ircre$ir;slv eerro!. coioeDs.ii.x to idjvt.rrd.s rlr. have oulftred !hyst..l ddaea d txe Esnrt of

I}ds ,o1diz6i!oD of airtituiLcs

dtl@ for

riU .!.:ate a seltous

the Jeloese sovcrnhent. Ilorev.r, as tn elerT

tnny denocmtic soctety, the Aolernient of JaFn will

rlrr-'

J 'o.' 'I ,,'ri'!!o 1c' j. e1s'e.

tlrc.iy o. trrr n ycero ego vte, the hesd or Ccneral l{.tos assued d inlolt&t lo:llioh tr Dur eorermentJ he stated that - 1Et tr

eood

lor c.Deral liol.or:

to hi,, .re t. md.{o.Dis g.n.r;t11l that thc Dnblic ,a. lot ir accord, T srar.s! tI.t this .are

-6-

reacttor !j11 lreval1 th Jata du ihrt uris

dcca{te.

In iderl,ilYins xttx txe !co?1.,

to tndurtry,

urâ&#x201A;Ź eoYerrienl,

(,

ol

Jnlen

as ol}og.d

rtr.l:

irrc iss.essircly in Eo.ecurj,,g

r,rdc

industries

contind.c to ]]o1Iate txe :thoslhere. .r?an'led sociar intuastluctuN.

(c)

ovcr d lerloa of ih" 'o, '" "1'

tire tle

cowermcnt

will atsorl

iility) xhtch is nov none Iy tndintduar cohpdl.s. (d) It trLe see the the eover ent 'iu. reilce tle to provlde coryorcte fjral.hg on a mie ltlleral

ba.i! the

3. Hd ri1]

vo.d d be

losslue in

t]1e U.S.

or nuro?ea

indnstry Lea.t to the.e cbarges in attitu{ies

soyerment

and

lollcjes? I anticilzte that

to{dds trre eencrally accâ&#x201A;Źpted .tod3rds and obJe.dlvcs of the business comrntttes of the U.s. ed ure E\Jropean C@tru

(a)

jty:

- return or investn nt - or RoI and lrolit ns.sins vill tecone not or].v bclite! ujer6to6d but acc.ltcd i, Jopa.cse blriless I)}.ctjccs.

The eares3ions

(Trrc

r$xr.en 1ai, drodtjre.l

c.r).ie in Uris confcrcnce

-7-

tu hcara oi tle djl.Ma lnrlclr d Jalanese orrcn &lfi1i.t. ts lo-tr f:ctrg j! its u.s. o!.ratio:)t, Tl,c

wlrcn

Ilolit rarsin :is ]]jeh.nousn tn relation to txc saF ,dustry tn J.rrn that ure ro:fj.r ls ]cing coi,.na.d lry ]]is .Dlerlors, tet so :.o!r ny U,s, Btordads tlut U.S. Ud authorities are cotrvth.ed that lilse lrofjts ee

(i)

nâ&#x201A;ŹtDE c.rcealcd).

vilLr lorrt inc?cssin.ry to the

,aarrs

lnsle.d of to tnc sovexDicnt ror tncjr ldan prot.ction.

InevtNab)y t :!o x:i1I l.ea.l to a reducrion in bor&xea 80/20

,atlo iodor.

.r.a

(.) v,j.h, \a,e.

p

ofrr mlrq:nc rs

De .'o@rE- lh pr..ir'/ coa., .nc, loliciei. flre rcdnction ih ftxcd loan reLjlencnt oblicettons) cohnlDed lttx goverhnert dbsorptioD of the rcspon-

s$ ity for

so.ia-l

oecuritr, tl1 lesser ine necessity

for raintainine sales volMc 1! tines of dccrini.s dmMd. fhereforc lriclng

(d) mrs

clanse in

{ll1 }e

lricilg ioucy vil1

leduc. the !.cssue

to "exlort'r darcsilc rec.ssj.ons. Inis

has 1]ceh

d n@.rtet

tne d.tarioratlon tn Ja!.n-!.g. acononlc

rclatiors dlrins tlre last

lbls }iotnt I rcnId lilr.

few

years. a

To d,rhsstre

nondt 1o dts.uss

-8thc clrcu's1,erccs rhichr

o- /.q .'r _, or r._' a s.rionJ Janan

doi..ttc

rcccssron

in 131. 19?a/.ar1y

1971

udertooh to e}?ort ihis rec.s.ion Urronsh @

sssressiwe

exlort thn$l into tle U,S. ralket, jncludtha

!!ice ,edlctions. unfo ,u3d.1y the u.s.

it" ."" **""r*

a'.

rhlt tine &d

nas cyroric.cina

conrrar.rr

ro ra!.ncae

s..elallJ nrintatrtq @! price3 t, the fa.e of ftdnced this, of c@rse, su!!.lted J:,!al's er:ort 10 solvc tt.s ov, prcbloi. Hox-

lolicy

ye vere

erer, 1t becme a}ldrent as c@Idr't

dea.l

1971 proaresscdr

t]]ai rc si@1y

vtth 6u oD recession od dieest t]]e

Jal)enese

flrls mc a rey f&tor vhich lrolsht of ou eovernicnt to alpry a 1oi iu:gax ' oD "U ijlor- 6, vh:.h vas arnou,.d or A.B sr ,.

I d conftdent that the adjn6tnent6 ir !!orr! o l. t'!es

tusineEs 1)olicles an4

.ralaesc relatioE with both tlrc u.S. da UE Over a perio.t

of eencrarly

hao,.d cmutty.

o, tjie txls rilr eliriiatâ&#x201A;Ź

accepted s'lardalns

of retu

on

tnreshent tx

i! Japo, FrrUrem..cj tl, $itl ,rovide .! inlloved b3i3 countLi.s ia tlre ftturo.

Jor

-9-

4,

Nidx theso crra!:e. in attiind.s no.tjtylne lrir.rlcics oi both goverm6nt .!d inaustryj r a;ttcir):Ld. Hr: rortcvine

o!,,31- !na.;,

(a)

nre.e vrl1 te a elor:ine ot rndus1ri.,l

lro1i] cllecrine a ,edtrcctio.i.s or Jald.so iiresblrt vith an erNal Ererur Dte l'ox tre balsace ol $1. ar.de in

trte ra.ec or r?oD 6 to 8{.

(b)

hoductron cosis

!1111 :increas.

nor o!1y rh rbsointe

tehs tlt also tn relotion to lraauc .tr c.sts iD tIe U,'s. .nd Iu&!3o CoNnity, Tbe odEtlgc r:lrt Jalc

!a!id tndustri.l Gr&nsior lr.vld1hE of scale vtII nccone GUtively l.ss

has erTerierced r'ron

tlre ecoronics

as aaTdsion s14s

tr

vi11 be nore ditftclar

to a!!ly the n*est [cch.o1oAr,

Es feci].iiJa.rer1 ty tlre ac..Ierati.e urorih cuk of tiâ&#x201A;Ź recent 1r:1.rr

Iator costs fill es.arqte ,ot onl.y as a resulr of liBlrg,aee rates, f,Itch shoul d coDlisra ar a rewel of aD!.ox stely lrrl !,ei year, but also as a redlli of tost prod'lction lton lat.r cotifl,ici:s. I .itici])at. r.re ftequent aha 1orye! vorr st.lrasc! ih t]je

niile!

rij.ljtr

tlr sianiric.nt lllaci rn !roCr.ti., cosLs vhlcl ts -..-.i': :. o'oP." '.'c

tnc4.rjrrr-1y stri.xcrt r,olhiton co!t!ol. jLrnd.rdj

{i[ G)

also .ontrihut. to

Jr.r.as..i

odr..Lton co:ts.

" r.s,.lt of the rn.r..sed costsr .ra!.n,s c.j}rcittive advanliese dth ure reit o, t!]e (orld vill gratua.r\ decllae. l'lris vul re{l&e the ratc of ea?oli sr.rLh tendins to brbc it irto llne xtitr rhe ,axj,iLr dicestilrc rate l! tle lj.s. and [uopcar cdo,Ditr. Ths, siyer tthe for tlcso adjnchrents r r6rad alttct ate th.t the .{s

qucstion of trade b.lance

vi1l !c..]e lnlort@ce lry txa €nd of thts ac.o.le.

one

of s..ondarv

!t thc cffect of these r:'ic choges h Jalu on the donesttc flont, Let's tur nov to lite exterml erdr-th of Ja1)orrs ecorortc strengll, rrricl! I see as rhe rcst st8ntt-

ve halc loorrcd

tcmt ne, ttrtust of the ?ois.

It

that

lolittcrl !o{o alrrys cees out of a p bauel, I m convtnced itEr J.Idr {i1f so.}ontr {qy in thts d€cade to shatLer this,n,rh. Ja-idis tnflnence - bodx econmic ad lolitical - vil1 gro. eubA tn1s d€cade tr a fom inclearjDcly urti1alierat ed .Le tnaele.dent of U.S. lolftic.I tnfhcnce.

Ue nust Ie prelarcd for a series or ld.i:a !,snocks!, iD the hdnths and yeD:s alrcait rcfI€cttng flds stirtt of indclcndeicc.

This xilt ihcrud. a raltd irore to est.btish a Der. rclattonstri! {iih china Eocrilictng Tzi}En i! tlc Eocoss.

Iactors lhich rill tnis exterhal izirs .r aas

,.Jao

Tse-luhe wno etated

Jalan's econonic Rornl tnclrnt.

r

-11-

(o)

A vclxr ni;rh

^1in.!dr

alr sroijns forcisn rrcla.x. tala.ce,

J.r,.n

h2s

tn.rc Is litlr.c queitior rLlt nrnt

thls rtll. c.ntrhtrc towords i.

10 .y.!ahd

ftor

oaer $16

til1nr icd..r

biujon :r.cve1, Ja!.h rill ,,o\'. Larressively to cour.L rhis lres r. by scc.,lcratinz lorcifil $20

invcstrc.ts dtlr.ra.tjc\1ax air,a3is o, tne deyclo!:na ,otions of a.d lattD

tle P..ifjc! t)rchdix; bolx s

Africa.

(b) I rccoerllron of so i.s endrona.rtal !rcr1en. vilr. encora{c tne ure deveroling ?orld. It ts a-1so 3+,rercrt thrt witl trre sroli.s labor Elorta(e Jr?anese

i.dlstry

hos .hrl ,111 coittnue

to rove

pdtt@lMlY t solrrrre.st Asia. (c) rapd recoenizes thc realil,r ot slo,tne potecttontsm od vill seeh to esteblisrr nautactutus olelations in the acvelortnc mrld for nore erfective lenetration ot

(d) ,oth tlre u.s. &a Japd ere rreconi.s acntcrr a?s?e of tlc irDcndine erelAl crl.ls vntcl vi11 reacll sertous prolorti.ns rry t]]e

end

of this dec.de. To a}lleciate

flE srsYitJ of uris !&])I thc !.s. tr vcqr ralldry icconinz a irlrer notir notion i, ni.er.l ed 1n relarton to uu! .sc.-1.itns l.riDirc!::.r]js.

-\2-

tc tedicul.rly criitcal jn t]]c.!orai, ljcld l.xo.c ro.rzy tI. 1,,s. n:aorts allto]: .t.lJ thc aaic dlout of encrcJ tn tl.. forn of oi1 .nd cas ai d...

JaFtr. IJo{er.r, rry }98t tt ls csttri.Lcil that fte U,s. jr!.It requixeicnis \'111 h...,e inc?cese.t ftve tnEs oner This

v

1

tnc cure.l, lcvel as ctrt?Ercd \dth a dor}Itig ol Jalri

rqu:ildicnts. lbt.r u.s. ctuac oir i{aort$ afoE arc estir.t.d at t3o rrirljon !c, rc.r ry lrot, dr.uii.e oit a, tlr,oo ler t.rr"!1 vitl1 tho lrotarr ity o, a 3tgriric.:nrly l$shcr rdce bY '!hlt datc.

0{a

ta1\ ariolt u.s. }a-ldcc 6f p6JDelts }tublens today,

tut

these

de Dot]]ilc coi!oe.1 fith UDse {irr 'c er1)erieDcc t. trre years ahead). (e) I antlcbate o exr.nston or Je!o-U.s. cooler.rton in lrivJti^ thrsdn nt in tle dc\e1oFt4 vorfd. ftris coo!c"atton ts .sscntial tf re de to edeEte the torces of irattonal mttonalis, vhich are er?andine so ml)idly

It

tlat ve seek ,!Js ol cooperaii.c in tlr. itcre:lolncnt of all lesources, bnt lrharilJ ercra. acaou.ces siren tlc !rcrraril y of sL ove$fl e1oh,tr sno.trgc w ,re erd ttuoudoul, tha r;or1d.

It ts lor this

vt11 arso be essâ&#x201A;ŹDti.f

th.t I sntrport ur. conceF of iojn! !,B.-Jard prcjects in s .ria ror the dcvclopimr of oi1 rcaso,

a.d sas. Ile nurt cohttDlc to s.ck,oi.! of ].rDonutne our int.rcats tn thjs field ns, certainty

Iy txc cari or

-13-

.rr.rttior tor mroiuccs xili. !).c a lotertirl tlr.rrt 1,o tu rclatlorslrirs ilich isr c)re..ts dI. rjrJliir of our !r.!.Dri tdl.rce of ,"raiLc issl!. this

decane, the

I lavc [atked atdt sone rraric c)r.n3e. vhlcx T erltj.tlate itu.ilg t c l97or3 xith rcser.i to !lt)1:c attltades dd tlr€ eov€Dliert a.a hnu.try rcacli.n to thcse cl,ensca. I llal,a s.ljo nmisiz.d ]:{r conci$io.s \riln reJ2rd to tl'! effect u'at lixts rdll rrarre on ovenll denclopont of Jald/ s donestic thonsh

l

€coaor.v

.ee tlrelc

ald crJernll ecor.Dic

tntrhcdi.t.

and

ero

lo.cc. {iem

r.

c}raGeo as )rcCerattnS

'r I 'arl.'1 +o st-.'. ou present tmde jlDa1arce. Tnts rea.lEd li3 ttlllon ttr rc!&'s iavor in 19?I ara certain\y will .llloach $\ biitloD durin6 the mrreLi y.ar. rtxe ee to roresiJl tle f.lces the rorc nmediete crtsis crcated ltr

of lr.te.iioris th the U.s. 1nerc N3t te norc evtdere of Jape!6 .olccrn ald hef rlllingn.ss to ]-ake acti.r ro.ednce tlir rr."de jrbald.c orr xho lear tem. In n{. vier) actI.n ts called t@ o! three I}onts:

(a)

TIre

ye, rs clcsly ud..vahca

1n

felation ro tle dou.r

frth.? rcvalultjon vorld noL h"jnE jrnediate adjutlients, it lrdld be e ?ort t step !n evjdenc-

and elilrousx e

trade

ilg Jald,s rccosdtio, oi r,lts fact rnit lrer viUi,.Bre.s t6 cooperotc. I antictl.Lc s rers]uar-ioi t. er,dt 2eo:{cn to the ao1lar, slrich rctreeclts a 10, r€dlctjo, tlon the ?.csenr o{ficial rate of 3c8, or a ?:{ rednctior lyda +-ne a.tlat ,.ie

of

301,10

ona

.f 'v

in i,lc rurcna ,!r]rel.

Jararcse l].J.nits refcrr.d to ihe

:Litrr

als.rsii,ns

-II]-

to tak. ,lac. in l,Ia:rri l:t.n of ihe Jer.

ne):r:

ve.t

as

Jlrl.s

rD.!l

rl

ttr. dis.!srjo).

lee

a at 1,lrc l,rt he.trr6i ,orcvcr,

l,toD

or'l,xts riettor, bnt Uris tiqe rdth lressurc larceiy fton

I

do

t}]e nur.ire..! Ccmurt'ly rathcr tl,a! tlrc

final ..txci3 tt

n!11 be thc ,rcssmcs

drlicilatc coxid.ra-

U.s, norercr, i,

tlre

vithin J!!ar xlrich

d1I detclilnc this actton, It is incon.etvatte to nâ&#x201A;Ź tlret the Jalalese Eovern:ent can contlhe to Nrcrrssc d.ue6 .t tte i.ereI oi $ro to $ro hitj lon ler dsy 1o sull)ort the d.llar at thc floor level of 301.10 vhich bas teetr tla case ower the last fev nonths. Seconaly, li aplears to acl&ys

tn

,e that thcrc is

Grovins concerD iD J@an over the i.resrtrrent and tFde deoteions ftsulrhc f.d d iifeari,

e

th.t f,ear of +his aciio, ts n&. daagire Ltr$ txe aciioh trsclt @d tlrat !]tjhotety this attttnaLe d1l lreaail vtthln JaId. (b) rn enoi :o , I ura! th. ,.d1n ^L "r"r" b. st-r o !ro,rd! of

a yen ra1.elnai,ion. 1

conyinced

for "nqrkct }ile!."ltzadiolii in Jarm, a lnrase vlrich encoDlasses thc cohcepi of lroth investnent ad tada. iliercsts cs pdttcilate ii ine Jeldese .cDnd(/, bchdtbE i'provcd clonels of djstailartton, tn Ure suic mJ es tlE Ja!.ne3e can Frttctpade

in tlr. U,s, naht, ve a"e goirg to

foce even nore serims rroble,is rrith tlre

(c) rrrirdrr,

sit!.tjon jn J..rrni3

lrotectlonj.t

coula r,c t.rrovcd

crDo.t,

dfjve,

:ln

tlris

forces

_15_

..t str0f.'tin3

rcJtriciion:, althondl vhicn ror:c srels jn tnis dire.rion.

lLE-!1i.. d_u.la dcv€lop

lilat I ar lqrcsti.: i. a viiinrlsv..r o, .rltficel tar: .rd fjl.nclnx inc.,tircs irlicl crc.urj:e a hcr aErrdrsi..,e er?ort U.S..mnd{r

I

how se€l.irg 1egt3:laiivs

have o?resscd bJ vievs nr a caDdia riay

!ftte.lion.

tn tte slirft of frank.ess

vlrich ctrar.ct.rizes our Jalm-Califo$ta lssociation neciinas. I lccogntze tlrat thesc rre not altoc.Ger pre.sirs

t.

ou! Jard€se ftiends.

I rc r't "r"o'-JJ "b'ut tr.r j.-oriJr or :j! o..d u 1.!' stoding of .or- mtnal ?rotlers) vhlch cd onlv cone e,rolt flDdetr nn honest ud olen €xcha;ee of vicvs, \rtthdtr Uis urdersr@di.s vc vil} never hd-nofize ou rrl,ual ccoloii. lron1ers! rr,io, I consider essenttal ror naintatnihx ! leacelul rc)1d cormnil,', a caue to cn I Inon xe ue all dcdicated. I ho?a,-@ wiU .ccelt qr presdtation in inat l.igIt. H@ev.r!