POLITICAL IMPACT ON BASIC US-JAPAN RELATIONSHIP OF IMPOSING QUOTAS ON JAPANESE TEXTILES

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-17-1-34-4
• Release Decision: RIPLIM
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: January 11, 2017
• Document Release Date: November 9, 2010
• Sequence Number: 34
• Publication Date: September 20, 1971
• Content Type: MEMO

No Objection to Declassification in Part 2010/11/09: LOC-HAK-17-1-34-4
V 40
SECRET /SENSITIVE INFORMATION
September 20, 1971
MEMORANDUM FOR: DR. KISSINGER
FROM: JOHN H. HOLDRIDGE
SUBJECT: Political Impact on Basic US-Japan Relationship
of Imposing Quotas on Japanese Textiles
We understand that the President is considering imposing quotas on Japanese
textile imports October 15 if a voluntary agreement cannot be worked out by
that time. This would possibly be done by invoking the provisions of the
Trading with the Enemy Act. We believe that in weighing this alternative he
should be fully cognizant of the likely political consequences for the Sato
Government and for our relations with Japan.
As regards the probable impact on the Sato Government, it should first be
recalled that the position of Prime Minister Sato's lame duck government
(he has announced that he will not continue after his current term as Liberal
Democratic Party (LDP) President ends in. November 1972) has been
substantially, though not yet critically, weakened by the effect of our China
and economic initiatives, coming on top of earlier domestic political setbacks
this year. Sato's objective now appears to be to remain only until he sees the
Okinawan Reversion Treaty through the Diet in the session getting underway
October 15, and in installing Foreign IM-i.nister Fukuda as his successor.
Given the break with him by former Foreign Minister Ohira (and head of the
LDP's second largest faction) over China together with the quickened
scramble of other LDP aspirants to the prime ministership to organize their
challenges for leadership of the Party, his chances for being able to hang on
that long are probably somewhat better than even. If, however, he comes
out on the losing side of the UN General Assembly's consideration of Chirep,
or, Japan meets with "... unsympathetic
and stern economic pressure from abroad- -especially from the U. S. , " then
Sato could well go under.
As regards the Sato Government's position, the importance of an imposition
of textile quotas on Japan would lie in the cumulative impact such a move
would have on Sato's position as mangger of the Japanese end of the U. S. -
Japan relationship. His capability to manage this relationship, which he
like his predecessors for the past two decades have held to be the pivot of
Japanese foreign policy, has come under serious attack as a result of the
lack of our prior notification on the President's July 15 China announcement,
and, to a lesser extent, as a consequence of our August 15 economic initiative.
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- No Objection to Declassification in Part 2010/11/09: LOC-HAK-17-1-34-4
 No Objection to Declassification in Part 2010/11/09: LOC-HAK-17-1-34-4
1P 0
SECRET !SENSITIVE 2
Given what we presume will be the application of the textile quotas to Japan
alone (in contrast to the multilateral application of the August 15 program),
an October 1.5 announcement could call down on Sato's head a new wave of
attacks on his stewardship of the U. S. -Japan alliance. If this did not
result in an immediate and fatal challenge to his leadership from within
the LDP, it would at least probably further and completely paralyze his
policy leadership.
If Sato were ousted under these circumstances, the succession chances of
Ohira, inclined toward greater independence of the U. S. in foreign policy,
would be substantially improved vis-a-vis Rukuda. If Sato remained, he
would probably be able to maneuver the Okinawan Reversion Treaty through
the Diet, given the widely shared desire in Japan to consummate the
Islands' reversion. Sato's ability to cooperate further with us on Chirep
would probably be critically impaired, and he could well be left with
insufficient influence to steer Eukuda's succession through the Party.
SECRET ET/ SENSITI
No Objection to Declassification in Part 2010/11/09: LOC-HAK-17-1-34-4