Memorandum of Conversation...2. our relationship with Japan an absolutely essential element of our foreign policy as the President said yesterday. Г hope this will be the first of

DEPARTMENT OF STATE

Memorandum of Conversation

DATE: April 11, 1975

SUBJECT: US-Japan Relations

PARTICIPANTS: The SecretaryThe Deputy Secretary

Ambassador HodgsonAssistant Secretary Habib

Deputy Assistant Secretary ZurhellenRichard Smyser, NSC

William Sherman, EA/J (Notetaker)

Kiichi Мiуazawa, Foreign MinisterTakeshi Yasukawa , Ambassador

Keisuke Arita, Deputy Vice MinisterToshio Yamazaki, Director American Affairs BureauТаkakazu Kuriyama, Counselor Japanese EmbassyTatsuo Arima, Private Secretary to the Foreign MinisterRyuichiro Yamazaki, Japanese Embassy (standby interpreter)

Distribution: S/S, WH (Rodman)

SECRETARY: It used to be axiomatic among the in-tellectual community that Japanese-American relationswere bad and we were criticized by them for making themthat way. Now that we have excellent relations as far asI can see it forces our intellectuals into new lins ofattack.

MR. МIYАZAWА: г made this trip primarily to get acquaintedwith you as you very kindly suggested shortly after 1became Foreign Minister. This is the first opportunitythat 1 have had to make the trip now that the Diet is

temporarily in recess because of our local elections Iam very happy to he able to meet you and appreciate

everything you have done to facilitate my visit.

THE SECRETARY: I hope we can stay in the closest contactand exchange visits reciprocally. I am prepared to visitJapan from time to time or conversations to make surethat we are thinking аlоng parallel lines. We consider

DECLASSIFIED A/ISS/IPS, Department of State E.O. 12958, as amended February 27, 2009

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our relationship with Japan an absolutely essentialelement of our foreign policy as the President saidyesterday. Г hope this will be the first of many visitsand look forward to seeing you in Tokyo. Our Ambassadorin Tokyo is ono of the few who is not trying to get myjob.

АМВАSSАDОR HODGSON: How come you know so much I findJapan very comfortably far away from Washington.

THE SECRETARY: I was in a panic when I saw on my calendarrecently that I was attending the swearing-in of EliotRichardson. I was glad to find out that I was swearinghim in as Ambassador to Great Britain.

AMBASSADOR HODGSON: I see he is already complainingabout the inadequacy of allowances like the rest of us.George Ball is certainly running for Secretary; he wastrying hard last night.

THE SECRETARY: If every President had to come up with atotally new foreign policy, I shudder to think what statethe world would be in. At least George Ball is con-sistent. When I see Bill Bundy on programs like that, Icould strangle him. He was the one who got us intoVietnam, and throughout his tour in the State Departmenthe was unable to got us out.

АSSISТАNТ SECRETARY HABIB: Bill Bundy called me one hourbefore he went on television. I gave him a full, clearstatement of the situation and urged him to tell it theway it was. But he didn't support us. Nobody wants tosupport us except a few bureaucrats who are afraid ofyou,

AMBASSADOR HODGSON: Тhаt's as revealing as our conversa-tion with the Senators this morning.

MR. MIYAZAWA: The Senators asked me my reaction to thePresident's speech. I said I was not qualified to passon the military judgments involved, but that I had theimpression that_ the total amount the President requestedwas designed not so much for military as for humanitarianpurposes. have the impression that the President wasreally seeking funds to provide for evacuation andhumanitarian гelief to Vietnam.

THE SECRETARY: Mr. Foreign Minister, the President ofthe United States cannot and will not after ten years ofwar say publicly that we are going to abandon our allies.If Congress does not wish to give us the funds necessaryto do the job, that is up to them, but the President of


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the United States cannot do this I don't believe thatyou in Japan would be pleased either with such a positionon the part of the President. Whatever amount of money itcosts, it is not possible to think in terms solely ofevacuation or of negotiations. We had to ask for the fullamount necessary to do the job. The President of theUnited States must make the transition as painless aspossible. In this indirect sense the President's speechdoes represent a humanitarian effort. A year from now,when Americans begin to feel ashamed of themselves, itwill be to the benefit of the President that he stood upfor the right.

MR. MIYAZAWA: In many ways it seems to me that the US wasinvolved not in a war in Vietnam, but in a cause -- acause of dеmоcгасу in Vietnam. Although this has not beenfully undегstoоd in Japan as a whole, there are many inJapan who did understand it, and we are sorry for thefailure of the cause. It seems to me that if the peopleof a nation are able to help themselves and willing tofight, it will be able to withstand adversity, although ofcourse I don't know the full situation.

THE SЕСRЕТАRY: bet me be frank. In the first place noJapanese official can say what he is really thinking atthe moment. I have to 'take with a grain of salt, not whatyou have said, Mr. Minister, but what public statementsare made. The President and I (with the occasionalsupport of other members of the Government) will do thebest we can to rally US public opinion. Granted theVietnamese did not fight well, but we put them in theposition where they could not. An Army that has notreceived any spare parts in a year, that has to ration itsammunition, and which feels it may be abandoned byits principal ally, has a hard time making any kind ofconcerted and organized resistance. You're generous toabsolve us from responsibility, but you can't do that.We must be reliable and trustworthy allies. It iscertainly better for you that way. Our words must meanwhat they sаy. Both the President and I will be speakingrather sternly to the US people over the next few weeks.What was don was not right. Of course I'm sure ourrelations with Japan are totally different, but if we donot handle our relations properly everywhere in the world,other countries must form their own opinions. If wewere to try Lo say something different or put a totallydifferent face on the realities of the situation in Vietnam,it would be as if after Dunkirk Churchill had said a groupof Englishmen took a boat trip last Sunday.


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MR. HABIB: Mr. Secretary I think you have found aForeign Minister who laughs at your jokes.

THE SECRETARY: I don't ask much of Habib except that hestop laughinc at his own jokes.

MR. MIYAZAWA: I'm sure he's occasionally very helpful toyou.

THE SECRETARY: I don't know how it is in Japan, Mr.Minister welcome foreign ministers here because theyhave to tell me what's going on. I don't always get thisinformation from my subordinates.

MR. MIYAZAWA: I try to be a part of the Foreign Office.I don't know whether you try to be a part of the StateDepartment.

THE SECRETARY: I have said many times that if I hadtried to be a Foreign Service Officer, I would not havemade it because I am not qualified.

MR. HABIB: Neither am I.

THE SECRETARY: You are an FSO.

MR. HABIB: No, I was not qualified. You at least wentto Harvard.

MR. МIYАZАWA: I am not sure, but have you largely droppedthe idea of "sense of mission" which you had in Vietnam?

THE SECRETARY: That's probably true. I have learned onemore lesson. When you are in high office, you have twochoices, you can use force or not use force, but you mustuse it only one way -- to win. No one wins any awardsfor using foгсе moderately. You must be effective.President Johnson involved the United States in twomilitary actions abroad -- the Dominican Republic andVietnam. Most intellectuals and newspapers opposed theintervention in the Dominican Republic, and most of themat that tine supported our intervention in Vietnam. Weput in so much force into the Dominican Republic that itwas settled within a very short time. But in Vietnam weescalated our strength so gradually that it was alwaystoo little and became a cancer. When President Nixon andI started trying to end our involvement, we were hamperedin any kind of effective prosecution of the war becausethe public had already begun to require the US to with-draw its troops.

MR. MIYAZAWA: I believe everybody in Japan understandsthe difficulty of your situation in Vietnam. We hopethat you can handle it in an orderly way and with dignity.DECLASSIFIED

A/ISS/IPS, Department of State E.O. 12958, as amended February 27, 2009

5.

THE SECRETARY: When we came into office, there werealready 550,000 us troops in Vietnam whom Bundy and othershad put there,

THE SЕСRЕТАRY: Let's turn to US-Japanese relations.What is our biggest problem?

MR. MIYAZAWA: I see nothing of an immediate or seriousnature. We may have some problems in the Diet because ofthe Vietnam situation. I say so because the ForeignMinister is always subject to harsh questioning aboutJapanese cooperation with United States policies inVietnam. With Vietnam ended, the opposition will losethis issue.

THE SECRETARY: Our opposition is infinitely ingenious infinding new issues when they lose one.

MR. MIYAZAWA: Exactly.

THE SECRETARY: I had a member of my staff make a studytrying to find out how much peace we could buy from theNew York Times if we did exactly what they advised us todo.

He consistently found that under the best circumstanceswe could be immune from criticism for as much as threemonths, but usually it was no more than three weeks.

AMBASSADOR HODGSON: We take it as a rule of thumb thatwhen an appointment is announced, the longest the incumbentcan go without press attack is three months.

MR. MIYAZAWA: Our history of democracy in Japan is soshort. Our parties have not yet learned how to cooperateor work constructively together to develop bipartisanpositions.

AMBASSADOR HODGSON: Your opposition is not strong enough.It is totally unprepared to do anything but oppose thepolicies of the government_ party.

MR. MIYAZAWA. The problem is also complicated by thefact that the LDP is the only party with power, and hasbeen except for a very brief period throughout the wholepost-war experience. All lines of authority and allpositions both in the Parliament and in the governmentare controlled by the Liberal Democratic Party. All theopposition сaп do is collect information and attack.


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АМВАSSАDОR YАSUKAWА: You know in our Parliament we havea provision for going into what you call executive session;however, an executive session has never been held inJapan.

THE SECRETARY: You know, Mr. Ambassador, when I haveexecutive sessions with the Senate on Middle East ques-tions, the Israeli Ambassador calls me to register hisviews on what I have said before I even see the transcriptmyself -- no, that's an exaggeration. They're usuallyvery good about preserving executive session secrecyespecially in the Senate. The House may be a littledifferent.

АМВАSSАDОR HODGSON: We walked out of our meeting withthe Senators on the Foreign Relations Committee thismorning with stars in our eyes after a truly ringingendorsement 1)y Senator Humphrey of the

impoгtanсе of Japan US relations.

THE SECRETARY: He can do it either way; you just have totell him in advance. No, I really love him, he is one ofthe great human beings in our society.

MR. MIYAZAWA: In our Parliament we are organized in sucha way that nothing can be passed without the permissionof the minority. Japanese democracy is still in itsinfantile stagе; so much that there is a question of howyou do it rather than what you do.

THE SЕСRЕТАRY: I must tell you the Japanese decision--making process absolutely fascinates me. When you don'twant to do something, you find it impossible to find aperson within authority. But when you do want to dosomething, you have the ability to set priorities and actas rapidly as you choose. The consensus building processis not one of simply making compromises you make goodsound decisions. The way you have handled is amazing.You have been able to contain the impact without bigspeeches, without fanfare but in an efficient and expertway and that has been very good. When I first came toWashington, Г was under the impression that you couldsimply go to the Prime Minister or Foreign Minister witha problem and get his agreement and rely on his decision.I didn't realize that this was not the way decisions aremade in Japan.

AMBASSADOR YASUКАWА: Have you got an example?

THE SECRETARY: Well the textile problem is an example.The textile negotiations shouldn't ever have been raised.


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I won't tell you what I think of our textile people. Wemade a mistake in thinking we should concentrate ourinfluence on the Prime Minister or the Foreign Minister.We didn't realize that in Japan you have to make decisionsfrom the ground up, in your normal way.

MR. MIYAZAWA: You are right. It is quite possible todevelop new and even audacious decisions in Japan, butthey do not come out of the leadership without carefulgroundwork.

THE SECRETARY: Mr® Foreign Minister, you can do thatonly in a society with a great sense of cohesion andshared values. This is one of the most extraordinarythings about Japan.

MR. MIYAZAWA: In general you think of Orientals as verygentle and calm people and so they are, but they can benasty once in a great while. You may be thinking of thisin dealing with Vietnam.

THE SECRETARY: Yes, it could be a catastrophic situation.

THE SECRETARY: Is the Prime Minister thinking of makinga visit before the Emperor comes in October?

MR. MIYAZAWA: Yes, I told Secretary Ingersoll yesterdaythat the Prime Minister would like to visit sometimebetween the end of July or early August.

THE SECRETARY: What would you think of early August. Iwill check with the President; we may be at the EuropeanSecurity Conference in July.

AMBASSADOR YASUKAWA: Will you be meeting with Brezhnevthen?

THE SECRETARY: No, not at that time.

AMBASSADOR НODGSОN: Mr. Secretary, I think the Ministerwould like very much to have a precise date that we couldset the meeting.

THE SECRЕТАRY: I'm practically certain that the firstweek in August - or let us say between August first and10th --would he fine. Would the Prime Minister wish tocome here or should we meet at some other location?

MR. MIYAZAWA: We would be very pleased to come here.

THE SECRETARY: That will he fine with us.


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MR. MIYAZAWA: Our current Diet session is supposed toend about May 25; however, because of the pressure ofbusiness and treaties up for ratification, it willprobably be extended at least a month and possibly two,so the first week in August would probably be quitesatisfactory from our point of view.

THE SECRETARY: Why don't we say between the first and10th of August:. What time are you leaving tomorrow. Iwill call you.

MR. MIYAZAWA: A little after nine.

THE SECRETARY (rising) : Mr. Foreign Minister I won'tmake a very long speech. First of all let me express myregrets again for my inability to meet with you yesterdayand also ехргess my great gratitude for your generousunderstanding of my problem. As you know I was totallytied up with the draft speech which we were preparingfor the President that evening. Mr. Foreign Minister, Ihave rarely participated in any event in which I couldsense the immediate change that I did when the Presidentvisited Japan last year. I had regarded the visit aslargely a ceremonial one, because, of course, we wereaware of the political situation in Japan. But thedepth of feeling for peace and continued close friend-ship between our countries that was symbolized by themeeting of His Imperial Majesty and the President andfurther developed in our conversations in Tokyo led meto realize hcw much the visit meant in terms of ourmutual relations. I have expressed my great admirationfor the extraordinary achievement of Japan over the pasttwenty-five years, and I want to reiterate that I attachthe greatest importance to the maintenance of close andfriendly relations with Japan and to our mutual interestsin the Pacific. Our task is to maintain this friendshipwith full consultation. Т count very much on the closepersonal relationship which I have now established withyou and hope to maintain a strong and lasting friendshipwith you. I would like to drink a toast to your visit,Mr. Minister, and to you and your party who can be with ustoday.

MR. MIYAZAWA: Mr® Secretary thank you very much for yourhospitality and your warm words of welcome. We are verygrateful for this lunch, indeed for the extraordinary luckwe have had :n being at this table for two days in a row.We fully understand the great problems that faced youyesterday and are grateful for the time that you have beenable to devote to us today. When I went to Moscow lastJanuary, your friend Brezhnev did not ever appear duringthe full three days I was there. As you said, Mr. Secretary,


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our relations are very good. When I left Japan I had amessage from the Imperial Court telling me that TheirImperial Маjеstiеs still remember with great pleasure andaffection the visit of the President last year and arelooking forward to seeing President and Mrs. Ford and theAmerican people when they come to the United States laterthis year. We are grateful for all that your Governmenthas been doing not only for Japan, but for peace in theworld and we do appreciate this occasion to meet anddiscuss our mutual problems. We have jointly many worldproblems to solve. Happily we have few serious bilateralones. I would like to offer my toast to the continuationof these most cordial and close relations.

THE SЕСRЕТАRY: Mr. Foreign Minister, I wanted to arrangea meeting for you with the President. Is your departureflexible? For example if I could get an appointment withthe President tomorrow morning would you be able to seehim.

AMBASSADOR YASUKAWA: The Foreign Minister's plane leavesat 10:00 and makes connection in New York for directflight to Tokyo.

MR. MIYAZAWA (to Ambassador Yasukawa): Don't worry aboutour convenience, that makes no difference. (To the Secretary)Anything can be done on my part, Mr. Secretary. Butplease don't try too hard. I know how busy the Presidentis. I would of course be very grateful if I could bereceived; however, I don't want you to try too hard.

THE SECRETARY: I'm practically certain I can arrange it.I'll call as soon as we go to my office. I'm making amistake to tell you. If I can't do it, you'll think Ihave no influence.

MR. MIYAZAWA: You've already done so much. I've had goodtalks with you - and pictures to prove it.

THE SЕСRЕТАRY: Will that help?

MR. MIYAZAWA: Yes, in my campaign.

THE SЕСRЕТАRY: Do you have to have new elections after anew Prime Minister has taken office?

MR. MIYAZAWA® Yes, definitely. We will have them butprobably not for a while. One thing we can't do is haveelections while the Emperor is away.

THE SECRETARY : Would you like us to keep him here?


I'm planning to give a speech in mid-June on Japan-USrelations. This is the only speech I have ever givendevoted to a single country. My staff told me I had to.

MR. HABIB: We only presented you with the opportunity.

THE SECRETARY: Any thing good or easy, they do. AllVietnam matters for example, are referred to me forimmediate decision.

MR. MIYAZAWA: That is what Secretaries are for.

THE SECRETARY: I thought that given the importance of ourrelations with Japan I have sufficient reason to devotethe time to make a speech solely on this subject. Youmust tell me whether I should be friendly or unfriendly.What would help in your election? Seriously, if there arepoints that would be particularly desirable to include, orpoints of special sensitivity or special importance, Iwould be happy, to include them. I'm very serious, I wouldgreatly welcone your views and suggestions. Please passthem on to Ambassador Hodgson in Tokyo. Also I would likevery much to hear from Ambassador Yasukawa here. I willprobably begin working on the speech in mid-May.

THE SECRETARY (to Yasukawa) : Are you coming to New York?

AMBASSADOR YАSUKАWА: Yes, if I'm invited. I already havebeen told that Т probably would be.

MR. MIYAZAWA: The Japanese will certainly look forward tohearing what you have to say. Whatever analysis you mightmake as a historian of the Japanese people and their rolein the world today would be most welcome to us.

THE SECRETARY: You certainly turned my wife into a greatfan of Japan. IL was very expensive for me. I now have ahouse full of Japanese art -- screens, prints, I like themvery much.

MR. INGERSOLL: You have a Hoshi.

THE SECRETARY: What?

MR. INGERSOLL: A tree.

THE SECRETARY: Oh, the tree. Unfortunately, that was forthe President. But I bought a good deal of screens andother thinqs.


АMВАSSАDОR HODGSON: One of my problems is that my wifehas discovered Japanese art and pottery.

MR. MIYAZAWA: Excuse me, Mr. Secretary, but how often doyou have dinner at home?

THE SЕСRЕТАRY: I'm afraid not more than once in twoweeks.

MR. HABIB: You should ask his staff how often they eatdinner.

THE SECRETARY: Mr. Habib is a combination of self-pityand paranoia. Habib will work twenty hours a day if oncein a while you will let him feel sorry for himself. Youread about bad morale in the Department. They all thinkI oppress them.

MR. MIYAZAWA: I hear you first met Mr. Habib in Saigon?

MR. HABIB: Нe tells that story all the time.

THE SECRETARY: He threw me out of his office.

MR. HABIB: He has been throwing me out ever since.

THE SЕСRЕТАRY: That was the beginning of the decline ofeverything.

MR. MIYAZAWA: I visited Saudi Arabia recently.

THE SЕСRЕТАRY: While King Faisal was alive?

MR. MIYAZAWA: No, for the funeral.

THE SECRETARY: Did you see the new King?

MR. MIYAZAWA: Yes, and the Crown Prince. The atmospherewas very tense. I found the King very confused.

THE SECRETARY: I envy you your delicacy of expression.The Crown Prince is the strong man. However, we can'ttell just what the political situation is. It is clearthat the King can't govern by himself, but it is not clearwhose influence is strong among the people around him.Prince Fand is clearly an able man, but not necessarilythe strongest.

AMBASSADOR YASUKAWA: You told me King Faisal prayed foryou five times a day. Is the new King still praying?


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MR. MIYAZAWA: No, the Crown Prince.

THE SЕСRЕТАRY : It is not an easy thing to conduct aconsecutive conversation with the new King over an extendedperiod of time. I know the Crown Prince very well and heis a close personal friend. He is not as religious as hishalf-brother. I doubt whether he is praying for me. Butit is a difficult problem. King Faisal was a religiousmystic but he was a very intelligent man. He was absolutelyreliable. A Bedouin, and very wise. He knew the weaknessof Saudi Arabia and he never allowed it to over involve it-self. Although he could sound like a religious nut, hewas always on the side of moderation in his dealings withthe United States. Fand is easier to talk to, not soexalted, also a friend of mine and personally very close.But he does not have so much influence with his people.He may be more tempted to use the $100 billion of reservesthey have accumulated for his own purposes. It is a muchmore problematical situation. Did you ever meet Faisal?

MR. MIYAZAWA: Yes, in Japan.

THE SECRETARY: The first time I met him I thought he wasa real fanatic. The longer I knew him the more I realizedthat he was a truly remarkable person. I'm going to writea book about the Arabs. I really think they are the mоstfascinating people in the world. Everybody thinks I'mgoing to write my autobiography, my memoirs, but my maininterest is in the Arabs.

THE SECRETARY: Do you remember Omar Saquaaf?

MR. MIYAZAWA: Yes.

THE SECRETARY: Omar Saquaaf spoke English better than I doand is a good friend with whom I had had many conversations.But one day I arrived in Saudi Arabia and he would noteven speak English to me. He was surrounded by advisers.I kept saying, "Omar, come off it", but he continued tospeak through an interpreter. I noticed that he had fiveadvisers so I told him, "I'm throwing mine out of the room,so under the rules of Arab courtesy you must throw yours outtoo." He kept his interpreter. Finally I threw out myinterpreter, апd he responded. I said to him, "Now, Omar whatgoes on?" Then he told me that Yamani had visited theUnited States and had been invited to Secretary Simon'shouse for dinner. When Omar Saquaaf had come he had notbeen invited by me, and he was humiliated by Yamani'slording it over him when he returned to Saudi Arabia. Buthe hadn't understood I didn't even have a house then. Ilived in an apartment too small to entertain anyone. WhenI explained, he learned English again. (At this point thelunch ended.)


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After lunch =he principals adjourned to the secretary'soffice to continue the discussion. Present were theSecretary, the Foreign Minister, the Deputy Secretary,Ambassador Hodgson, Ambassador Yasukawa, Мr. Habib, Mr . Arita,and Mr. Yamazaki:

MIYAZAWA: Mr . Secretary, since we have covered so muchin the meetirg with Secretary Ingersoll yesterday, I thinkwe can make this meeting short. The first thing I wouldlike to bring up is the Prime Minister's visit.

THE SECRETARY: I think we can count on a visit betweenthe first and the tenth of August. I will have to checkthat with the President, but I am sure it will be all right.

MIYAZAWA: I have brought with me a message for the Presi-dent and will give it to him tomorrow morning when I seehim.

The question of security is important for Japan and I wouldlike to talk about that. As you know we are consideringratification of the Nuclear Non-Proliferation Treaty (NPT).The government will try to introduce the NPT at the currentDiet session. In that connection the Diet will be discussingsecurity. Your Ambassador and our people in Tokyo haveachieved a meeting of the minds on how we can phrase a state-ment on the general security matter. I would like you toconfirm or verify your agreement to that statement.

THE SECRETARY: Yes, it is agreeable to me. I see it aspress guidance. no you want us to say it to our press?

MIYAZAWA: Yes, if you are asked.

INGERSOLL: We will give it out as press guidance.

THE SECRETARY: Let me have a word with you on oil policyand the question of the minimum oil import price. I havethe impression that there is some misunderstanding aboutthis. There really are two points: 1) the price of Pon-OPEC oil, and 2) the price of OPEC oil. We want to bringdown the price of OPEC oil. Therefore we need to developalternative sources of non-OPEC oil. If we don't, priceswill stay up, hut if we develop alternate sources, stabilitycan be achieved. We would be happy to have other countrieshelp develop our oil resources, and we are prepared to workjointly with other countries in developing their resources.


14.

Each country would share in the development of their ownpotential supply and would join in protecting the price ofnew oil by mutual agreement. If Japan wants to buy oilbelow that level, that would be all right so long as itdoes not sell below that level. If you can get oil at $4per barrel ar.d then put a tariff on it of $3, that wouldbe satisfactory. Then OPEC would not be able to defend itsmonopoly by selling below the price of oil from newsources. If OPEC could wreck new sources of supply, itcould raise prices again. If the OPEC members came to uswhen oil prices were $10.89 per barrel and said theywould reduce it to $7.50 in return for a five-year agree-ment, we would have to look at it, but this is not a currentissue and I know of no country to whom they have madesuch a proposal.

MIYAZAWA: I see your rationale.

THE SECRETARY: So you see the rationale for a floorprice. I don't care about the floor price, really, hutrather the dеvеlорmеnt of alternate sources. When we getalternate sources, we can compete. Without floor priceswe won't get alternate sources.

MIYAZAWA: How much will it cost to produce oil fromalternate sources?

THE SECRETARY: We think about $7.00 per barrel. Somewould cost more than $7.00. Each country can develop oilfrom new sources. Some might be able to do it for less.

INGERSOLL: Тhеге is some off-shore ail which might beinteresting for Japan.

MIYAZAWA: Milton Friedman wrote an article recently inNewsweek on this. It seemed to be a total misconception.

THE SECRETARY: Friedman thought I was trying to protectthe price of OPEC oil. Actually, I am trying to protectthe price of oil from alternate sources. He totally mis-understood our proposal.

We have no interest in protecting the price of OPEC oil.If they sell it to us at $2 per barrel, we don't care,so long as we don't sell at $2. We want to protect alternatesources. The purpose is to drive down OPEC prices.

MIYAZAWA: I think you are right. The price of alternatesource oil could be anything, maybe $5 or $12, but we would


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give them an incentive. Alternate energy prices would thusbe higher.

THE SECRETARY: Just so long as it is below the presentworld price. The world price would not be given protection. For example, a $7 price would be below the currentworld price. We won't protect a world price over $10.

I would also like to talk to you about the problem of worldgrain reserves. I understand you have some difficultieswith this concept and I would like to explain our analysisof that situation. Mr. Ingersoll mentioned to me that youare concerned that, if Japan maintained grain reserves,these would present a target for LDC's which might at somefuture time face food deficits. I am not sure how I cananswer that с concern.

INGERSOLL: Тhеге would be no call on Japan to give awayreserves. The cost of maintaining grain reserves would beincluded in the price of grain when it is sold.

THE SECRETARY: It would he well for Japan to acquirereserves, although that won't solve the problem you have.

INGERSOLL: Japan would have full control over its reserves.

THE SECRETARY: Perhaps you would have to look at grainreserves as an aid program, if you had to make shipments todeficit countries.

MIYAZAWA: I suppose so.

I would like to have your insights on the Middle East situa-tion.

THE SECRETARY: Certainly. The Arabs and Israelis deserveeach other. If they were located anywhere else in theworld, we would let them have a go at each other. Unfortunatelythey are located in a strategic place. I will be frankwith you. The Israelis thought we were weak and that Ineeded a success.These factors combined to make them in-tractable. We are not that weak. Congress cannot conductforeign policy. It can vote money, but it can't conductforeign policy. Previous experience has made that clear.The fact is that no one can make peace in the Middle Eastexcept us. If we support Israel, there will be no progress.There might be ё war, but no progress. So we won't bepushed. The Soviets understand that and do not push usbecause they know we can produce results. So we are engaged


in a reappraisal on our part. I think it is still possiblethat there will be an agreement between Egypt and Israel.If not, we will go to Geneva. With patience there will beprogress. Next time we move it will succeed because wewon't move unless we know that an agreement is achievable.

We have six months to make progress before the situationgets tense. We are determined to succeed. Maybe there canbe some interim agreements and then an overall approach.We won't let the situation get out of control. All this isto Japan's benefit.

The last bгеak-uр of talks had benefits. First, it taughtthe Israelis and Egyptians that they can't get along with-out us. Ever the Soviets know that. Second, it forced usto initiate domestic debate. Third, Congress is notgoing to fight us on this. It can't interfere with ourpolicies in Vietnam and toward Israel both at the sametime. The US Congress may look strong, but we can'toperate on the basis of what they are saying. It won'tmake any difference what Congress does. In Geneva or inIran or еlsеwhеге in the Middle East we can do what wewant. We arc engaged in a war of nerves now. As thePresident said, we will not tolerate a stalemate whichwould risk a new outbreak of war. We want to make progress.Sadat thinks so too or he wouldn't be so quiet. For a fewweeks we will keep a low profile.

MIYAZAWA: Ву your absence you can let your presence beknown. It is also clear that your government is strongenough to accept realities, don't you think? I would alsolike to ask whether Syria will let the UN units stationedin the Middle East remain until the end of May.

THE SECRETARY: Your first observation is a good one.There is certainly no doubt about our strength.

The situation of the previous Syrian government was in-conceivable. Syria was tough but not reliable. Egyptannounced agreement to a three-month extension of the UNEF.Syria now seems willing to extend the UN presence for twomonths, thus Dndin ч both groups at the same time. The realproblem is at the end of July.

If has been a pleasure to meet with you, Mr. Minister.

I hope that I may see you tomorrow morning with the President.


Documents

Memorandum of Conversation...2. our relationship with Japan an absolutely essential element of our foreign policy as the President said yesterday. Г hope this will be the first of