that Chairman Mills had played a considerable part in encouraging the Japanese restraint offer and he gave it his broad blessing provided it wac accompanied by similar arrangements for other suppliers in Asiaong Kong Taiwan and Formosa.
OF
THAT
(ii) Almost at once the President rejected the
Japanese proposal as falling short on the terms essential to the United States in certain signifi-
cant respects the principal ones being the level of exports proposed was too high and the number of controls on particular categories of textiles was too low. The President said he would support
quota legislation. There is reason to believe that the Japanese were genuinely surprised at the Fresident's rejection of the Japanese industry's offer which, as they saw it, represented a major
concession on their part and risked setting a
dangerous precedent for other Japanese exports to the USA. Nobody, including ourselves and Hong Kong knew what to do for the undesirability of siding
with either the President or Chairman Mills, and
thus offending the other was perfectly apparent.
(iii) Then, a month later, in early April,
the
President announced that he had decided to send
Ambassador at Large, Kennedy, overseas to examine at a very high level the outstanding problems in international trade with a view to finding
constructive solutions; his object would be
consultation and he would not have negotiating
powers.
We at once took the view that Ambassador Kennedy's
mission represented the best hope of restoring some
sense in the US textile situation and this remains
our opinion.
3. Ambassador Kennedy has already visited Japan, Hong Kong,
Taiwan and Korea. Ambassador Kennedy should be encouraged to give an account of these discussions
/but