5. IN THESE CIRCUMSTANCES THERE IS ABSOLUTELY NO QUESTION OF A BREAKDOWN IN THE TALKS AT THIS STAGE. C AND W INTEND TO CONTINUE THEIR DISCUSSIONS AT THIS LEVEL AT LEAST UNTIL THE END OF THE MONTH. WE ALSO KNOW THAT THE 2KDD ISSUE IS ONE TO WHICH ABE WHO IS NOW IN WASHINGTON AND MR NAKASONE WHO WILL ARRIVE THERE
NEXT WEEK WILL BE PREPARED TO ADDRESS THEMSELVES IN DISCUSSIONS WITH THE AMERICANS, WHOSE POSITION ON THE AMERICAN END OF THE CABLE IS STILL NOT ENTIRELY CLEAR AS FAR AS WE ARE AWARE.
6. WHILE WE SHOULD DO NOTHING TO RELAX THE PRESSURE ON THE JAPANESE
TO BRING THIS MATTER TO A SATISFACTORY AND PREFERABLY SPEEDY CONCLUSION, THIS WOULD I SUGGEST BE A THOROUGHLY INAPPROPRIATE MOMENT IN WHICH TO TALK OF SPECIFIC RETALIATION AGAINST THE JAPANESE IN THE EVENT OF AN UNSATISFACTORY OUTCOME, PARTICULAPLY RETALIATION OF A SORT WHICH IS NOT DIRECTLY RELATED TO THE MATTER IN HAND. THE JAPANESE GOVERNMENT RESPONSE WOULD ALMOST CERTAINLY BE ONE OF IRRITATION OF NOT ANGER FOLLOWED BY TRUCULENCE AND POSSIBLY A LESS HELPFUL ATTITUDE THAN THEY HAVE BEEN DISPLAYING IN RECENT DAYS. MY OWN VIEW STILL REMAINS THAT THE MOST EFFECTIVE THREAT OF RETALIATION IN THIS FIELD COULD BE MADE BY C AND W HINTING AT A POSSIBLE SWITCH IN THEIR PURCHASES OF TELECOMMUNICATIONS EQUIPMENT FROM JAPAN TO ALTERNATIVE SOURCES OF SUPPLY. WE COULD HOLD IN RESERVE THE OTHER PROPOSALS SET OUT IN PARAGRAPH 6(4) OF MY TELEGRAM NUMBER 269 OF 30 MARCH, EG A POLICY DECISON BY HMG TO DISCRIMINATE AGAINST JAPANESE TELECOMMUNICATIONS CARRIERS IN ANY FIELD OR BY DELAYING THE ENTRY OF THE JAPANESE TELECOMMUNICATIONS EQUIPMENT INTO THE UK. A THREAT TO IMPOSE ADMINISTRATIVE DELAY ON THE ENTRY OF DATS WOULD BE MORE APPROPRIATE | SUGGEST IN THE CONTEXT OF OTHER DIFFICULTIES WITH THE JAPANESE,
EG OVER THE TRADE IMBALANCE.
7. MORE GENERALLY I HOPE THAT MINISTERS WOULD BE PREPARED TO GIVE CONSIDERATION IN THE LIGHT OF THE MOST RECENT DEVELOPMENTS HERE TO A CAUTIOUS SLIGHT OF SHIFT IN THEIR POSITION ON THE C AND W ISSUE. IT IS HIGHLY UNLIKELY THAT THE JAPANESE GOVERNMEN WOULD HAVE BEEN PREPARED TO SHIFT ITS POSITION TO THE EXTENT THAT IT HAS (EVEN ALLOWING FOR THE FACT THAT THERE IS STILL SOME WAY TO GO UNTIL A SATISFACTORY CONCLUSION CAN BE FULLY ASSURED) WITHOUT SUBSTANTIAL PRESSURE FROM HMD. COULD WE NOT NOTE MR KARA- SAWA'S LATEST REMARK AND HINT AT LEAST THAT THESE ARE THE RESULT OF BRITISH MINISTERIAL INTERVENTION, WHILE MAKING IT CLEAR THAT THERE IS SOME WAY TO GO AND THAT HMS REMAIN CONCERNED TO SEE A FULLY SATISFACTORY OUTCOME? THIS WOULD BE A JUSTIFIABLE LINE AS SEEN FROM HERE AND COULD HELP TO CONTINUE TO PUSH THE JAPANESE
Confidential
| TOWARDS
Page 135Page 136