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DELIBERATE ACT OF POLICY TO HAVE CONDUCTED THE INTERVIEW IN A FAIRLY LOW KEY, IN THIS HIS AIM WAS TO AVOID AN QUOTE EXPLOSION UNQUOTE WITH THE AMERICANS WHICH HE FELT MIGHT HAVE OCCURRED IF THE JAPANESE LINE HAD BEEN AS NEGATIVE AS IT WAS AT THE TALKS IN MAY. OHIRA THEREFORE AGREED TO A SUBSEQUENT AMERICAN PROPOSAL FOR QUOTE FACT- FINDING UNQUOTE TALKS ON TEXTILES WHICH NOW SEEM LIKELY TO BE HELD IN WASHINGTON IN MID-SEPTEMBER. THE JAPANESE UNDERSTAND THAT NEHMER AND TRESIZE WILL LEAD FOR THE AMERICANS: TAKAHASHI, HEAD OF THE TEXTILE BUREAU IN THE MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY WILL PROBABLY HEAD THE JAPANESE DELEGATION.
3. IN AGREEING TO THIS PROPOSAL THE JAPANESE INSISTED, AS THE COMMUNIQUE MAKES CLEAR, THAT SUCH TALKS SHOULD BE HELD WITH NO COMMITMENT WHATSOEVER TO A FUTURE COURSE OF ACTION. THE JAPANESE VERSION OF THE COMMUNIQUE IS NOT REALLY ANY STRONGER THAN THE ENGLISH VERSION ON THIS POINT. THE JAPANESE ARE HOWEVER CLEARLY WORRIED ABOUT THE POSSIBILITY THAT THE AMERICANS MAY COME UP WITH SOME EVIDENCE OF DAMAGE TO A SECTOR OF THE AMERICAN TEXTILE INDUSTRY AND INVITE THE JAPANESE TO STUDY IT AND DRAW THE LOGICAL CONCLUSIONS.
4. FROM THIS IT WOULD SEEM THAT THE JAPANESE POSITION HAS NOT WEAKENED ON THIS ISSUE. SO FAR THERE HAS BEEN NO SIGN THAT THE JAPANESE WILL BE READY TO MAKE A CONCESSION ON THIS IN THE HOPE THAT IN RETURN THE AMERICANS WILL BE MORE FORTHCOMING ON POLITICAL ISSUES SUCH AS OKINAWA. THIS POSSIBILITY CANNOT HOWEVER BE RULED OUT IN THE PERIOD LEADING UP TO PRIME MINISTER SATO'S VISIT TO WASHINGTON IN NOVEMBER.
(RECEIVED WITHOUT PASSING INSTRUCTIONS).
SIR J. PILCHER.
[PASSED TO ALL INFORMATION ADDRESSES]
INTERNATIONAL TRADE DISTRIBUTION
COMMODITIES DEPT.
H.K. DEPT.
AMERICAN DEPT.
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