CONFIDENTIAL
the line that we should now wait for a year or so to see how whisky
imports and the whisky market in Japan developed.
3. Turning to textiles Mr. Bottomley said that the question of US protectionism had been a matter of increasing importance and concern
last year.
Although the Mills Bill had not been passed in the last Congress, it had now been reintroduced, although it was not clear when
hearings on it would begin. Had there been any talks between Mr. Ushiba and Mr. Flanigan recently? Mr. Hirahara replied that there had
been no formal talks during the last month and the negotiations were suspended de facto. The "final" cards were on the table but differences between the two sides were still great. No progress had
been made at a recent informal meeting. The official position of the Japanese Government was that the negotiations would be continued but
at official level the feeling was strong that there was little prospect of a possible compromise. The situation in Washington was
unclear with estimates of the start of the next round of hearings on
the Bill varying widely between March and autumn.
This was very embarrassing for the Ministry of Foreign Affairs since it meant that there was no impetus for the Japanese Government to push their textile industry towards a compromise with the Americans. On the American side there seemed to be less pressure for a compromise agreement, but he was not sure why this should be so. Mr. Bottomley replied that we
had gained a similar impression from the State Department. But he
wondered how long this situation could last. President Nixon would presumably have to fulfil his election pledges by October 1972 at the
latest unless he could show that it was a Democratic Congress which
had frustrated him. If the promise was to be fulfilled by means of legislation there was presumably a considerable risk that it would
take in much more than textiles..
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4. When Mr. Hirahara commented that Mr. Flanigan's very tough
attitude in the talks might be the result of being under the thumb of the US textile industry, Mr. Bottomley enquired about the views of
the Japanese textile industry. lir. Hirahara said that there were some elements in the industry's position which were not quite logical.
The Government had expected industry to favour a voluntary export control arrangement. But Japanese experience over the LTA had been taken by the textile industry as showing that voluntary export control arrangements lasted for a very long time whereas US import controls only lasted for 2 or 3 years. This was coupled with a certain national feeling that Japan should not accept illogical demands from
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CONFIDENTTAL