Alliance in Anxiety: Detente and the Sino-American-Japanese Triangle

Detente and the Sino-American-Japanese Triangle

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Editor THIRD DELIGHT The I~zter~zatio~zalizatio~z of Highel Edzrcation in China Rui Yang I \ ~ R E T H I N K IJ,APAN'S N G IDENTITY INTER~\AT~O~AL ROLE A n Intercztltztral Perspective Susanne IClein

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~APAK'SFOREIGK POLICY L

M

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A Qzrest for Normalcy Kevm J. Cooney

E N G I ~ E E RTIHNE C STATE ; The Hztai River and Reco~zstrztctionin Nationalist China, 1927-1 93 7 David A. Pietz J , A P A ~ \ E S EDIRECT I~

V E S T ~I \ I CHIIU E~T Locatio~zalDetermi~zantsand Characteristics John F. Cassidy STATIIS PO\YER /apanese Foreign Policy Making toward Korea Isa Ducke WORDSKILL Destrztctio~zof "Class Enemies" in China, 1949-1 953 Cheng-Chi11 Wang THET R I F I I iRT ICU G A I I R ~ C L E Corporatmns, Workers, Bz~reaztzrats, and the Eroston of Japan's Nat~onal Economy Satos111 Ikeda

SHOIZO-KEK A Late Medieval Daime Sukiya Style Japanese Tea-hoz~se Robin Noel Walker TO PO\ ER FROMTRAUSITIOU ALTERUATIOU Democracy zn Soztth Korea, 1987-1997 Carl 1. Saxer

HISTORY OF JAPANESE POLICIES IN EDUCATION AIDTO DEVELOPING COIINTRIES, 1950s-1990s The Role of the Sztbgover~zmental Processes Takao Ihnibeppu

STITEFORMITIO~, PROPERTI RELI T I O ~ SIUD , THE DE\ ELOPMEVT OF THE T O K L J G i ~ EV C O U O (1600-1868) ~I~ A POLITICIL E c o h o ~ kAUALYSIS OF Grace H. Kwon CH1U~'SCI\IL A\ 1iTIOU I U D I I S T R ~ O P E ~ I NT HCE; DOOR hlark Dougan Immigration, Ethnicit): and Globalization in Japan THEBIBLEAKD THE GUY Betsy Brody Christianit)] in South China, 1860-1 900 THEPOLITICS O F LOCALITY Joseph Tse-Hei Lee Making a Nation of Communities i~zTaiwan Hsin-Yi Lu Copyright 2003 by Taylor & Francis Books, Inc.

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Published in 2003 by Routledge 29 VC7est 35th Street New York, NY 10001 ~\~~v~v.routledge-ny.com Published in Great Britain by Routledge 1 1 New Fetter Lane London EC4P 4EE \x-\x-\x-.routledge.co.~~k Routledge is an imprint of the Taylor 8: Francis Group. Copyright O 2003 by Taylor 8: Francis Books, Inc. All rights reserved. N o part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without written permission from the publishers.

Libvay of Congvess Cataloging-itz-PublicationData Ito, Go, 1966Alliance in anxiety : dttente and the Sino-American-Japallese triangle1 by Go Ito. p. cm. (East Asia) Includes bibliographical references ISBN 0-41.5-93435-4 1. United States-Foreign relations-China. 2. United States-Foreign relationJapan. 3. China-Foreign relations-United States. 4. Japa11-Foreign relation-United States. 5. China-Foreign relations-Japan. 6. Japa11-Foreign relations-China. 7. United States-Foreign relation-1969-1974. 8. Detente-History-20th century. 9. Nixon, Richard M. (Richard Milhous), 1913- 10. Kissinger, Hens!; 1923- I. Title. 11. East Asia (New York, N.Y.)

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To my parents Atsuo Ito and Kyoko Ito And my most patient wife Ayako

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E D I T E DB Y

EDWARD BEAUCHAMP

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CONTENTS

Figures Chronology of Events Preface 1 Introduction: Detente and the Sino-American-Japanese Triangle 2 The Alliance Dilemma and the Structural Dynamics of Triangles 3 The Emergence of the Sino-American-Japanese "Romantic Triangle" 4 Japanese Economic Submission to the United States: A Response to the "Alliance Dilemma" 5 Sino-Japanese Normalization and the End of the American "Romantic Triangle" 6 Japan's Pursuit of Independence in Foreign Policy: A New Response to the "Alliance Dilemma" 7 Conclusion: An Analogy of the Triangle between the Detente Period and Today

Bibliography

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FIGURES

Figure 1-1: Security Institutions in Western Europe and East Asia Figure 2-1 : Four Types of Triangles Figure 2-2: Three Phases in the Sino-American-Japanese Triangle Figure 2-3: Sino-Japanese Relations and the U.S.-Japan Relationship Figure 7-1: Commonalties between the Early 1970's and the Post-Cold War Era

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CHRONOLOGY OF EVENTS

1969 Jan. 21 Mar. 2 May 10-1 8

May 28 Jul. 25 Nov. 10-12

1970 Jan. 1 6 Feb. 11 Mar. 9

Jun. 22-24 Oct. 24 Nov. 9Nov. 20

Nixon's inauguration The Soviet-Chinese clash on DamanskyIZhenbao Secretary of Commerce Maurice H. Stans visits Japan, South Korea, Taiwan, and Hong IZong for textile negotiations. National Security Decision Memorandum 1 3 The Guam Doctrine Wakaizumi agrees with IZissinger on the secret agreement, which (1)admits of U.S. reentry of nuclear weapons after the U.S. return of Okinawa, and (2) exchanges Japan's export restraints over textiles for the U.S. reversion of Okinawa. The Nixon-Sato Meeting in Washington -They agree to the return of Okinawa in 1972. -They agree to the U.S. return of Okinawa and the Japanese concessions over textiles.

IZiichi Miyazawa became MITI minister for textile negotiations. John B. Connally, former Governor of Texas, became Secretary of the Treasury in the Nixon administration. The Japanese government presents the U.S. with nide-memoire indicating willingness to undertake selective export restraints if injury is proven. The Stans-Miyazawa Meeting on Textiles The Second Nixon-Sato Meeting in Washington The Flanigan-Ushiba Talks on Textiles (until Dec. 13) The U.N. General Assembly takes up the Important Question Resolution for the entry of the PRC.

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Chronology of Events

xii 1971 Mat 8 M a t 11 Apr. 20-

May 31~ ~ 141 .

Jun. 15Jun. 1 7 Jul. 5 Jul. 1 5 J u ~20. Aug. 13-

Aug. 1 5

Aug. 28 Sep. 1 5 Sep. 22 Sep. 25 Oct. 1 5

Oct. 2 5

Nov. 9Nov. 1 0

The Japanese textile industry announces its voluntary export restraint plan. Nixon rejects the Japanese industry's plan. Ambassador I<ennedy visits Tokyo and other Far Eastern countries in pursuit of textile negotiations (until May 31). Kennedy's second round of negotiations (until Jul. 1 5 ) Japan announces an eight-point program to reduce its balance of payments surplus, including increased import liberalization, accelerated cuts in tariffs, promotion of capital investment, reduction of nontariff barriers, and so forth. Takeiri's First Visit to Beijing (until Jul. 6 ) The U.S. and Japan signs the reversion of Okinawa. Sato reorganizes the cabinet, with Takeo Fukuda as Foreign Minister and Kakuei Tanaka as MITI Minister. Nixon announces his incoming visit to China ("The First Nixon Shock"). Third Kennedy textile mission (until Aug. 8 ) President Nixon holds a secret meeting of senior economic and White House officials at Camp David (until Aug. 15). Nixon announces the New Economic Policy ("The Second Nixon Shock"). Japan does not suspend foreign exchange trading, and the Bank of Japan continues to buy dollars at the 1 dollar = 360 yen rate until August 28. The Japanese government closes the foreign exchange market. Group of Ten finance ministers meet in London, but the meeting fails to resolve the dispute. Sato decides to co-sponsor Taiwan's U.N. seat with the United States. The G-10 meeting for the IMF and World Bank annual meeting. Tanaka and Kennedy initial "Memorandum of Understanding" limiting Japanese exports of textiles to the United States. The U.N. General Assembly negates the Important Question Resolution, and votes to accept the PRC as China representative. Treasury Secretary Connally's visit to Japan (until Nov. 11) Tokyo Governor Minobe passes the "Hori letter" to Zhou Enlai.

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Chronology o f Events Nov. 30-

Dec. 17-18

1972 Jan. 3 Jan. 6 Jan. 2 3 Feb. 8-11 Feb. 21-28 May 7-23 May 1 5 May 1 6 Jul. 7 J u ~25. Aug. 31Sep. 1 7 Sep. 29

1973 Jan. 2 3 Feb. 1 2

Feb. 22

Mar. 1 6 Apr. 14-21 Apr. 23 May 3 Jul. 25

At a Group of Ten meeting chaired by Connally in Rome, Volcker says that the United States will eliminate the surcharge in return for early decision on trade concession, progress in sharing defense costs, and the dollar depreciation. The U.S. also hints that it might devalue the dollar by 10 percent against gold (until Dec. 1 ) . The Smithsonian Conference decides a new exchange rate. Japan agrees to revalue by 16.9 percent against the dollar, West Germany 13.6 percent, Britain and France 8.6 percent, Italy 7.48 percent.

I<ennedy and Ambassador Ushiba sign formal bilateral agreement limiting Japan's textile exports. The Nixon-Sato meeting in San Clemente (until Jan. 7 ) Gromyko visits Tokyo. The Southeast Section Chief of the Foreign Ministry Wasuke Miyake visits Hanoi. Nixon's visit to China and Shanghai coinmuniquC (Feb. Second Komeito's visit to Beijing Okinawa is returned. George Shultz succeeds John Connally as Secretary of the Treasury. Tanaka becomes prime minister. Takeiri's second (third Komeito's) visit to Beijing (until Aug. 3 ) The Nixon-Tanaka meeting in Hawaii (until Sep. 3 ) Shiina's visit to Taipei The Sino-Japanese diplomatic resumption

The Paris accords to end the Vietnam War The United States announces a 1 0 percent devaluation of the dollar. The Japanese government moves to the floating exchange system. Negotiations between the U.S. and the PRC for establishment of liaison offices (I
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xiii

xiv Jul. 31Sep. 21 Oct. 1 7

Chronology of Events resumption in Paris (and Aug. 14) The Nixon-Tanaka meeting in Washington (until Aug. 1) The North Vietnam-Japan diplomatic resumption The Organization of Petroleum Exporting Countries (OPEC) raises the price of crude oil 70 percent (the oil crisis).

Copyright 2003 by Taylor & Francis Books, Inc.

PREFACE

Three decades ago, President Nixon's abrupt announcement of the U.S. opening to China produced an unintended impact, or more correctly a "shock," on Japan. Although detente implied relaxation of confrontations between the two blocs, the Nixon-IZissinger strategy was perceived as what would bring "crisis" to Japan. This study seeks to cover extensively the impact of U.S. policy during the period on Japanese attitudes toward the United States. In his 1969 Present a t the Creatzon: My Years zn the State Department, Dean Acheson stated, "History is lived forwards but it is written in retrospect. We know the end before we consider the beginning and we can never wholly recapture what it was to know the beginning only." Applying theoretical arguments to the detente period, this study seeks to go a step further than documenting an important case in Cold War diplomatic history so that we can capture its policy implications for today's ambiguous triangular configurations. With the emergence of China and Japan as major powers, coupled with the end of the cold war, my inquiry into Japan's perspective at the origins of the U.S.-Chinese-Japanese "triangular" relationship will have current foreign policy relevance. Moreover, I will investigate to discover the linkage between strategic imperatives and economic interests, and to challenge prevailing U.S. views of the evolution of U.S.-Japan relations. During the early 1970's, it was the Sino-U.S. rapprochement, rather than Japan's growing economic power, which underlay the onset of friction between the U.S. and Japan. By examining an indirect effect on economic relations of a security-driven U.S. foreign policy initiative, my findings in the book will help inform theoretical efforts to assess the forces shaping foreign policy. In the actual process of rewriting my manuscript, I noticed several times that the National Archives in College Park, MD, and the National Security Archive, Washington, D.C., have declassified new documents of the Nixon

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xu1

Preface

period. While this study pursues the application of international theories to a historical case, documents cannot be too updated. Right after both archives declassified documents regarding the gradual process from the July, 1971 I
Copyright 2003 by Taylor & Francis Books, Inc.

Preface

xvii

I also had a chance to talk to Lowell Dittiner in Beijing in the fall of 1998, where he gave me insightful comments on a variety of modified versions of triangular diplomacy. Moreover, through several projects administered by the Japan Foundation, Mike Mochizuki has stressed the importance of the triangular factors when we think of any of the bilateral relations among China, the United States, and Japan. Financial assistance was indispensable for such a seemingly time-consuming project. I would like to thank the Rotary Foundation, the Japan Society for the Promotion of Science, and the Graduate School of International Studies, University of Denver, and the Sakurada Foundation for providing financial support. Nothing was more valuable for me to complete this project than my relationships with my family and friends. My first thanks go to my parents Atsuo Ito and Kyoko Ito, who have never been out of Japan, probably did not recognize much about what their son was doing in Denver, Colorado. I am also thankful for my friends during my days in Denver: Greg Moore, Virginia Bacay, Eiichi Hoshino, Cheryl Dawson, Phil Hsu, Ben Gochman, Rich Shannon, Matt Houngnikpo, and Oki Takeda, some of whom already left the U.S. for all over the world. Finally, this book could not have been completed without the patience of two people. Farideh ICamali was patient enough to wait for me to complete the whole manuscript, and then became quick enough to move it to the production as a book. My wife Ayako has also been patiently supportive during the days of my writing this book. Without her constant encouragement, this book could not have been completed. I humbly dedicate this work to her. Go It0 Meiji University Tokyo, Japan

Copyright 2003 by Taylor & Francis Books, Inc.

CHAPTER ONE

INTRODUCTION: DETENTE AND T H E SINO-AMERICAN-JAPANESE TRIANGLE

Since Deng Xiaoping announced the need for China's focus on economic development in 1992, the rapid growth of the Chinese economy has attracted the worldwide attention. The rise of China has questioned the traditional security and economic ties between the U.S. and Japan, and U.S. foreign policy has been drifting between China and Japan regarding the establishment and maintenance of its major outposts and responsibilities in the East Asia and the Pacific region. The September 11 terrorism marked a drastic turning point. We found a need to think of the "unthinkable," and there is no guarantee that the lingering potentials for crisis in East Asia will be resolved even temporarily through negotiations, diplomatic efforts, and other conventional means.' The disappearance of the Soviet threat has freed China, the United States, and Japan from their common goal of containment. At the same time, conflict has emerged over the Security Treaty and economic policies between the U.S. and Japan, over human rights and security issues between China and the U.S., and over memories of war crimes inflicted by Japan on China. All in all, the overall picture of East Asian international relations is still ambiguous. For instance, Samuel P. Huntington argued a decade ago that the new chief threat to the United States was posed by Japan in the economic area: The United States is ohsessed with Japan for the same reasons that it was once ohsessed with the S o ~ i eUnion. t It sees that country as a major threat to its primacy in a crucial arena of power . . . The increases in Japanese economic power have produced reactions in the United States similar to those produced during the Cold War by increases in Soviet military power . . . [X]n economic cold war is de~elopingbetween the United States and Japan.?

A few years later after the Chinese economy started to grow rapidly, he shifted his designation of the post-Cold War threat in East Asia from Copyright 2003 by Taylor & Francis Books, Inc.

2

Alliance in Anxiety

Japan to China, and argued in his controversial article "The Clash of Civilizations? ": China is rapidly increasing its military spending and vigorously moving forward with the modernization of its armed forces . . . Its military buildup and assertion of sovereignty over the South China Sea are proyoking a multilateral regional arms race in East Xsia.3

Unfortunately, Huntington's rapidly shifting perspective reflects the overall U.S. difficulty in applying Cold War lessons to the new Asian security environment. By focusing on the impact of China on the U.S.-Japan relationship, this study seeks to analyze the structural dynamics of the Sino-AmericanJapanese triangular relationship. More specifically, it explores how the 1969 Nixon-IZissinger decision and its 1971 announcement (in the context of their overall ditente strategy) to pursue rapprochement with the People's Republic of China (PRC), fundamentally altered the U.S.-Japanese relationship. First, by supplanting Japan with China as the principal instrument of containment in East Asia, it signalled a relative reduction in the strategic importance of Japan for the United States, along with a corresponding readiness to view Japan as much as an economic competitor as a strategic ally. Second, from the Japanese perspective, the U.S.-China rapprochement (and the failure of the Nixon administration to consult or even notify Japan of that radical shift in U.S. foreign policy) signalled a need to fundamentally reappraise Japan's relationship with the United States. In that process, unquestioned subordination to U.S. foreign policy goals would yield to the objective of increased autonomy, driven largely by fear that the U.S. government would reconsider its security relationship with Japan in favor of cultivating ties to the PRC. To document and explain that shift in U.S.-Japan relations, this study examines the triangular relationship among the U.S., Japan, and China at the time of its emergence in the early 1970's. The study has the following four purposes: (1) It supplements the conventional view of the growing economic friction between the U.S. and Japan (associated with Japan's emergence as an economic rival), by assessing the impact on the bilateral ties of the change in the strategic relationship brought about by the accommodation between the U.S. and the PRC. ( 2 ) It proyides a more complete oyerall assessment of a byproduct of the Nixon-I
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Introduction

3

(3) By documenting the Japanese reaction to a U.S. policy change at the incipient period of U.S.-Japan trade friction, which has recei~edlittle prior scrutiny, the study sheds light on subsequent attitudes by Japanese leaders toward dealing with the United States. (4) By highlighting the importance of China to U.S. policy options toward East Asia, it seeks to provide a more informed perspective on future directions of the Sino-U.S.-Japanese triangular relationship after the Cold War.

OVERVIEW OF ISSUES-SCOPEOF THE BOOK This study addresses the Nixon-IZissinger strategy toward an opening to China and its impact on the U.S.-Japan relationship. Before that triangle emerged, relations between the U.S. and the PRC were dominated by ideological confrontation, and Japan's governmental policy was largely an extension of U.S. containment strategy. Nixon and IZissinger, by exploiting the Sino-Soviet split to pursue improved relations with both Communist adversaries, succeeded in achieving detente both in Europe (e.g., SALT I) and in Asia (e.g., the end of the Vietnam War). That is, the Nixon-IZissinger strategy toward an opening to China was linked with their overall detente policy toward the Soviet Union. Regarding the Sino-American-Japanese triangle, during the negotiating phase preceding the announcement of the rapprochement, Nixon and IZissinger pursued somewhat contradictory strategies toward the PRC and Japan. Toward China, they repudiated the ideologically-driven U.S. policy dating back to the 1949 "Fall of China," in favor of pursuing a quasi-alliance. Toward Japan, by contrast, they emphasized traditional anti-Communist ideology in order to draw Japanese concessions over textiles and the reentry of nuclear weapons into the Okinawa islands, in exchange for their nominal reversion to Japan. Concerning the impact of Nixon's announcement of an opening to China on the U.S.-Japan relationship, this study documents how Japanese leaders recognized the American policy change toward China, and how the Nixon administration perceived the Japanese reactions. First, regarding China, the Sato cabinet (1964-72) and the Tanaka cabinet (1972-74) tried to resume Japan's diplomatic relations with the PRC, immediately after Nixon announced the rapprochement. Second, toward the United States, the Japanese government began to pursue a more autonomous position in foreign policy, in order not to get entrapped in the U.S. global strategy. For example, between 1972 and 73, the Japanese government repeatedly rejected U.S. appeals to reduce Japan's trade surplus and to strengthen the yen and, in September 1973, the Tanaka cabinet recognized North Vietnam with an eye to cultivating new political ties with Southeast Asia.

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4

Alliance in Anxiety

To explore these policy shifts, this study covers the period from the U.S. policy formation of the Sino-U.S. rapprochement during January 1969July 1971, through the unfolding Japanese response to Nixon's announcement during July 1971-October 1973 (when the oil crisis occurred).

The Cold War history of East Asian security had two distinctive characteristics not found in Western Europe: the absence of a common enemy and the corresponding absence of multilateral security institutions. It was in the context of these characteristics that the Japanese government was "shocked"4 by Nixon's announcement of the U.S. opening to China, although the Nixon administration had no intention of changing its relationship with Japan. First, unlike Western Europe, in which all states regarded the Soviet Union as their threat, no common adversary existed among East Asian countries. For instance, North Korea was the imminent enemy for South Korea, the PRC for Taiwan, and the Soviet Union and the PRC for Japan. The Southeast Asian Treaty Organization (SEATO) during the 1950's also failed, because the Filipinos sought economic aid, and the Pakistanis hoped for support against India from the institution. Second, in addition to the absence of a common adversary, state leaders' memories of Japan's aggression before and during World War I1 made it difficult to build multilateral or collective security institutions. For East Asian countries, only the U.S. government had been a reliable security partner. Successive U.S. administrations made bilateral security treaties with Japan (1951),the Philippines (1952),and South Korea (1954),but no further relationship had been established than the normal resumption of diplomatic relations among the allies. The differences in security institutions between Western Europe and East Asia can be depicted in Figure 1-12

Western Europe

C

East Asia

NATO

Figure 1-1: Security Institutions in Western Europe and East Asia Copyright 2003 by Taylor & Francis Books, Inc.

Introduction

5

In the bilateral alliance with the U.S., the Japanese government maintained two distinctive foreign policy principles during the Cold War. First, the U.S. security guarantee enabled the Japanese government to renounce acquisition of nuclear weapons. In the December, 1967, Diet, Premier Sato advocated the "three non-nuclear principles," in which Japan would not possess nuclear weapons, manufacture nuclear weapons, or allow the introduction of nuclear weapons into Japan. According to the principles, even if the U.S. government brought nuclear weapons on to U.S. military bases on Japanese territory, the Japanese government had the right to monitor them. Second, the Japanese government was able to separate economic policies from security in its foreign policy making. The "Yoshida doctrine," named after former Premier Shigeru Yoshida, argued that the Japanese did not pay attention to security imperatives and constraints with Communist countries in seeking to cultivate economic relations with them. In other words, economic exchanges were not restrained by the U.S.-Japan security relationship. Given the absence of multilateral security institutions, the unilateral U.S. pursuit of containment in East Asia had contributed to the erosion of American preponderance. By exploiting disputes between the major Communist states, however, the Nixon-I
That approach to limiting U.S. military intervention became known as the Nixon doctrine. While being aware of diminished U.S. capabilities, Nixon and I
Copyright 2003 by Taylor & Francis Books, Inc.

6

Alliance in Anxiety

In the absence of a common adversary a n d multilateral security institutions, successive U.S. administrations intervened in conflicts in Asia witho u t much assistance of its East Asian allies. For the U.S., the prolonged involvement in Vietnam created numerous international a n d domestic problems, a n d the Nixon administration sought t o conduct a n " l ~ o n o r a b l e retreat." For the U.S. allies, however, the U.S. provision of security o n a bilateral basis caused more serious fear of abandonment than if multilateralism h a d prevailed among East Asian countries. Lack of governmental communication in the region heightened that fear, most dramatically when Nixon announced the opening t o China.

NOTES 1011 the future directions of China, some argue that the relentless economic growth heralds its emergence as a great power posing a threat in peace and security in the region, while others contend that the economic growth will face a serious deca!; and the government will fail to coinplete its political reforms. See, for instance, Michael E. Brown, Owen R. CotC, Jc, Sean M. Lynn-Jones, and Steven Miller (eds.),The Rise of China (Cambridge: MIT Press, 2001); Gordon G. Chang, The Coming Collapse of China (New Yorlr: Random House, 2001). 'Samuel P. Huntington, "America's Changing Strategic Interests," Sztruival, Vol. 33, No. 1 (JanuaryIFehruary, 1991), pp. 8-10. 3Samuel P. Huntington, "The Clash of Civilizations?" Foreign Affairs, Vol. 72, No. 3 (Summer, 19931, pp. 48-49. "n Japan, Nixon's announcement of the Sino-U.S. rapprochement has been called the first "Nixon Shock." jMichio Royaina, "Reisengo no Kokusai Seiji (Iilternational Politics after the Cold War)," Michio Royama and Toshiki Gomi (eds.), Gekido-ki no Kokztsai-seiji ulo Yomitoku Hon (HOWto Watch International Relations in the Tztrbztlent Period) (Tokyo: Galruyo Shobo, 1992),pp. 266-71. 6John Lewis Gaddis, Strategies of Containment: A Critical Appraisal of Postwar Anwrican National Security Polic)' (New Yorlr: Oxford University Press, 1982), p. 283. 'Tad Szulc, The Illztsion of Peace: Foreign Policy in the Nixon Years (New York: The Viking Press, 1978), pp. 125-26. W a r y Icaldor, The Imaginarj, War: Understanding the East-West Conflict (Cambridge: Basil Blaclrwell, 1990),p. 125.

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CHAPTER TWO

T H E ALLIANCE DILEMMA AND T H E STRUCTURAL DYNAMICS OF TRIANGLES

Kenneth N. Waltz has argued in his Theory of International Politics that, "in international politics, agents and agencies act; systems as a whole do not. But the actions of agents and agencies are affected by the system's structure . . . Structure affects behavior within the system . . . indirectly."' As opposed to the "inside-out" pattern of thinking that foreign policy is the result of unique interactions of intra-state actors, structural realists have emphasized the impact of the anarchical structure which constrains state options. "States are differently placed by their power . . . [Tlhe pressures of competition weigh more heavily than ideological preferences or internal political pressures. "2 Structurally, it had long made sense for the U.S. to entice China into an anti-Soviet alliance. Anti-communist ideology, however, blinded U.S. administrations from Truman through Johnson to this structural "logic." Yet, as U.S. nuclear superiority gave way to nuclear parity in the late 1960's, the prospect of increased Soviet assertiveness provided a new impetus for U.S.-Chinese rapprochement. In the case of U.S.-Japan relations in the early 1970's, the transition of the regional balance of power in East Asia from bipolarity to a more ambiguous structure, a transition launched by Sino-American rapprochement in 1971-72, had a larger impact on Japanese policymakers' perceptions than Nixon and IZissinger expected. First, the U.S. opening to China originated primarily in the U.S. strategy of pursuing ditente with the Soviet Union, and the Nixon administration had no intention of replacing Japan with China as the cornerstone of containment in East Asia. Nevertheless, Japanese leaders feared being abandoned by the United States. Second, although such issues as textiles, an opening to China (the first "Nixon Shock"), and a New Economic Policy (the second "Nixon Shock") represented totally separate agendas inside the American decision-making proCopyright 2003 by Taylor & Francis Books, Inc.

8

Alliance in Anxiety

cess, Japanese leaders regarded them as a linked set of radical policy shifts which would repudiate the established postwar partnership.: The idea of an international system structure has sought to explore how the balance of power shapes state objectives and behaviors beyond leaders' perceptions and preferences. For example, even when states' political leadership remains unchanged, a change in the international system can result in a transformation of foreign policy objectives and behaviors. Conversely, notwithstanding dramatic changes in leadership, the continuity of an international systemic structure constrains new leaders from radically altering a country's foreign policy. The postwar Japanese foreign policy can be characterized as largely "reactive"4 to external pressures rooted in the global and regional balance of power. To illustrate the dynamic change in the Sino-American-Japailese triangle during the Nixon period, the following discussion draws on two concepts: the "alliance dilemma" and a structural model of "triangles," which are based on the same structural logic first outlined by Kenneth N . Waltz.

Alliances are defined as "formal associations of states for the use (or nonuse) of military force, intended for either the security or the aggrandizement of their members, against specific other states, whether or not these others are explicitly identified."' Although students of international relations have studied how alliances are "formed," few attempts have been made to understand how they are "managed." The study of "alliance management" explores the political processes of alliance maintenance after alliances are formed.6 A promising approach to this issue has been developed by Glenn H. Snyder. The discussion which follows draws on Snyder's model to strengthen the case study of U.S.-Japan relations, and the case in turn provides a test for the adequacy of an international systemic approach to alliance theory. As in Europe, the overall picture of international politics in East Asia prior to the Nixon period was dominated by ideological confrontation. For the United States, in the 1950's and the 19607s,there existed two very different "games": one outside and the other inside its capitalist bloc. First, external to the U.S. bloc, an "adversary game" was conducted in which the objective of U.S. foreign policy was to contain what was seen as monolithic Communism, consisting primarily of the Soviet Union and the PRC.' In East Asia, containment had drawn the United States into two wars: the KOrean War, and the Vietnam War. In response to the threat of Communism, the U.S. government utilized Japan as the most important springboard for its foreign policy objectives in East Asia. Second, within the capitalist bloc, there existed an "alliance game" in which successive U.S. administrations provided both security and eco-

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The Alliance Dilemma and the Structural Dynamics of Triangles

9

noinic guarantees to its allies. In East Asia, the U.S. government helped stimulate Japan's economic revival at the same time as it provided Japan's security against the two communist powers. For Japan, which lost its Chinese market in accordance with U.S. containment strategy, U.S. assistance had been indispensable for rebuilding its economy. For two decades of close relations with the United States, Japanese leaders grew accustomed to getting a "free-ride," on the U.S. provision of international collective goods.8 The partnership with the United States, however, created another "security dilemma" for Japan. The U.S. government did provide Japan with security against the "communist threat," but the U.S. assistance created two kinds of fears inherent in the "alliance game." As Glenn H. Snyder point out, once an alliance is formed, "the allies will be exposed to the risks of being abandoned or entrapped by the [other] allies."' Abandonment, in general, means "defection," i.e., the ally either de-aligns, or realigns with other partners. Entrapment, by contrast, implies being dragged into a conflict over an ally's interests that the other party does not share. Snyder called this situation the "alliance dilemma," since the allies are not able to escape from both fears at the same time, i.e., steps that reduce weakening one fear would heighten the other. Japanese leaders, however, did not pay much attention to this dilemma until Nixon announced accommodation with the PRC. In the bipolar "rules of the game" characterizing postwar international politics, the superpowers had been solidly committed by their own interests to defend their allies. U.S. policymakers needed Japan's security cooperation in order to contain the Soviet Union and the PRC, while Japanese leaders needed both U.S. military protection and economic assistance. To be successful in the "adversary game," the U.S. government needed the "alliance game" as well. Both games were inseparable for the U.S. global strategy. In this situation, Japanese leaders did not have to worry seriously about being abandoned from the security relationship with the United States. It was therefore primarily the fear of entrapment into the U.S. containment strategy-with its constant danger of war-that concerned Japanese leaders, while the weakness of abandonment fears enabled them to dissociate Japan's interests to some extent from U.S. global objectives. As opposed to the general image of Japan's excessive dependence on the United States, the absence of the weaker ally's abandonment fears in a bipolar system helps explain the relative autonomy of Japanese foreign policy during the first two decades of the Cold War. Successive Premiers attempted to avoid remilitarization (in the late 1940's and early 1950's), to modify the U.S.-Japan Security Treaty so that the Japanese government should be consulted prior to the U.S. military use of Japanese territory (in the late 1950's), to explore non-governmental trade relations with the PRC (in the 19607s),and to pledge the reversion of the Okinawa islands, despite U.S. reliance on its military base there during the Vietnam War. Assuming Copyright 2003 by Taylor & Francis Books, Inc.

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Alliance in Anxiety

that the U.S. government would never abandon Japan as the cornerstone of security in the Far East, Japanese leaders were able to maintain a considerable distance from the United States. When Nixon became president, the clear border which demarcated the two different games began to blur. Nixon and I
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ally had to worry about the risks of not only entrapment into a superpower conflict, but also of abandonment by the United States. Two kinds of responses are likely to follow when an ally experiences such a shift. First, in the short run, fear of abandonment makes the ally prone to succumb to its partner's demand. When Nixon announced the opening to China, Japanese leaders' immediate and principal fear was abandonment, driven by concern that the U.S. government would shift to reliance on the PRC for containment in East Asia. Thus, following the announcement of the Sino-U.S. accommodation, the Japanese government granted concessions in economic negotiations with the United States. The excessive reliance on the U.S. provision of security and economic guarantees prevented Japan from warding off U.S. demands on textiles and currency adjustment. Second, in the long run, an ally begins to pursue a more autonomous foreign policy in order better to cope with the twin fears of the "alliance dilemma." The search for autonomy which follows from fears of abandonment is different from that associated with fears of entrapment. In the absence of fears of abandonment, autonomy represents an ally's effort to dissociate its interests from the superpower, while remaining its ally. A clear border between the "alliance game" and the "adversary game" in a bipolar system made it possible for allies to regard their superpower's "adversary game" as a dependable fixture. By contrast, when the superpowers begin to cooperate, and the border between the two "games" blurs, an ally faces heightened fears of abandonment. The pursuit of autonomy now has a more fateful potential outcome, since the costs of abandonment can only be averted to the extent that one reduces the extent of dependence on the established relationship, while moving toward a rapprochement with the enemies from whom one originally sought protection. The above application of alliance theory suggests how decision-makers were impelled by the incentives and constraints stemming from the changes in the international systemic structure. Specifically, state leaders' perceptions toward allies are affected by whether the system is bipolar or multipolar. With the recovery of Japan and China's demonstration of autonomy from Russia, the Asian balance of power in fact shifted toward multipolarity in the early 1970's. As a result, this study must also be concerned with a critical subset of "a theory of multipolar systems," that of the "triangle."

Alliance theory's characterization of the "alliance dilemma" points to differences in approaches to alliance management in response to changes in the international systemic structure. Nevertheless, it refers only to bilateral relationships, omitting to explain how the dynamics of trilateral relations work in a multipolar system. For instance, a dominant state A attempts to

Copyright 2003 by Taylor & Francis Books, Inc.

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Alliance in Anxiety

subordinate states B and C by means of exploiting the "alliance dilemma." As long as the strategy is successful, A has leverage over B and C. If B and C recognize A's intention and establish a stable alliance, however, A may lose the leverage. While the theory of the "alliance dilemma" does not argue against this alternative, only a model which explores the structural dynamics of "triangles" can illustrate all possible sets of policy options among three actors in a multipolar system. In the early 1970's, the triangular configuration among China, the United States, and Japan stemmed from the Nixon administration's readiness to blur the distinction between an "adversary game" and an "alliance game." With ideological demarcation between two blocs blurred, the U.S. government had fewer incentives to provide its allies with a security umbrella and economic guarantees. At the same time, it repudiated ideologically-driven perspectives in favor of cultivating a quasi-alliance with the PRC. The scholarly literature on the dynamics of "triangles" (triangular diplomacy) has focused primarily on the Sino-Soviet-American triangle. When students of international relations examined the impact of the U.S. opening to China on the bipolar international structure, some claimed that a model of "triangular relations" could enable the United States to achieve leverage over the two communist actors, as long as the Nixon administration succeeded in isolating China from the Soviet Union. It focused on the division of what was seen as a monolithic communist adversary, revealing China as a quasi-ally against the Soviet Union.' As both Mill Chen and Lowell Dittiner have argued, the dynamics of the Sino-Soviet-U.S. relationship suggested a structural approach that could be applied to other triangular configurations. The following identifies the four conceivable configurations, which depend on various patterns of amity and enmity within the triangular structure: positive relationships among all partners, positive relationships between one "pivot" player and two "wings," but a negative relationship between the two wings, ( 3 ) a p o s i t i ~ erelationship between "spouses," but two n e g a t i ~ erelationships between each spouse and a third "pariah," (4) negative relationships among all partners."

Invoking Dittmer's terms, I call these types respectively "Me'nage a trois," "Romantic Triangle," "Stable Marriage," and "Unit-Veto Triangle." The U.S. leverage over the Soviet Union and China in the early 1970's was predicated on a "Romantic Triangle," which consisted of two positive relationships (the Sino-U.S. accommodation and Soviet-U.S. detente) and one negative relationship (the Sino-Soviet split). The U.S. government enjoyed leverage by playing off the other two actors against each other. Based on Dittmer's four types of configurations, a depiction of the SinoAmerican-Japanese triangle can illuminate both Japanese subordination to

Copyright 2003 by Taylor & Francis Books, Inc.

The Alliance Dilemma and the Structural Dynamics of Triangles A m i t y - - -Enmity

M h a g e ri trois

Romantic Triangle

Stable Marriage

Unit-Veto Triangle

Figure 2-1: Four Types of Triangles Source: Lowell Dittmer, Sino-Soviet Norrzalization and Its International Implications, 1945-90 (Seattle: University of Washington Press, 1992),p. 153.

and autonomy from the United States, as it shifted across three historical phases. Phase One is characterized by autonomy from the U.S.; Phase Two by Japanese submission; Phase Three by resurgent Japanese independence. During Phase One, before Nixon became president, the triangle comprised two negative relationships (Sino-American and Sino-Japanese relations) and one positive relationship (U.S.-Japan relations). The U.S.-Japanese "Stable Marriage" led Japanese leaders to rely excessively on the U.S. provision of security and economic guarantees, and prompted Chinese leaders to regard US.-Japan relations as a case of capitalist "collusion." The Sino-Soviet split in the late 1960's created a fear of encirclement for Chinese policymakers, which eventually inspired their interest in accommodation with the United States during the Nixon presidency.' 3 In Phase Two, after Nixon took office, the U.S. pursuit of accommodation with the PRC altered the triangular configuration from a "Stable Marriage" to a "Romantic Triangle." In addition to the established amity of U.S.-Japan relations, the Nixon administration's approach toward the PRC added a positive relationship between China and the United States, a result which diminished the Japanese position from U.S. "spouse" to a mere "wing." The Sato cabinet, however, did not recognize the U.S. policy shift (and emerging "Romantic Triangle"), as long as Nixon and I
Copyright 2003 by Taylor & Francis Books, Inc.

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Alliance in Anxiety

the renewal of the U.S.-Japan Security Treaty which was scheduled for review in 1970. In Phase Three, Japanese leaders, shocked by Nixon's announcement, began to pursue the resumption of diplomatic relations with China. Normalization between China and Japan eventually created a Sino-AmericanJapanese "Me'nage a trois," yet this outcome only emerged after a period of intense bilateral diplomacy involving each "pair" in the triangle. Thus, even after the announcement of an opening to China, the U.S. government sought to keep Sino-Japanese relations negative so that it could explore the possibility of assigning dual seats for the PRC and Taiwan in the United Nations. Next, in opposition to the U.S. strategy of keeping Sino-Japanese relations estranged, leaders in both China and Japan sought governmental contacts with an eye to diplomatic resumption. For the PRC, the resumption of ties with Japan was designed to strengthen its security against the Soviet threat, while, for Japanese policymakers, it meant repudiating the hostile relationship compelled by U.S. containment strategy. Faced with the Sino-Japanese overtures, the Nixon administration began to fear a SinoJapanese "Stable Marriage," which could exclude Taiwan from the defense area agreed at the U.S.-Japan summit in 1969. Referring to the dynamics of the Sino-American-Japanese triangle, the following table illustrates the impact on the U.S.-Japan relationship of amity vs. enmity between China and Japan. First, if enmity exists between China and Japan, the U.S. government has leverage over both China and Japan by playing the two countries off against each other. With Sino-Japanese relations estranged, the U.S. government can draw Japanese concessions by an "issue linkage" strategy, i.e., linking the U.S. provision of security to Japanese economic concessions. The strategy subordinates Japanese policy goals to U.S. interests.14 Conversely, when amity exists between China and Japan, the Japanese government exchanges confronting a perceived threat from China for cultivating a close relationship. If the triangle contains three relationships of amity, the U.S. policy of "issue linkage" vis-a-vis Japan collapses, since the Sino-Japanese partnership has assuaged the Chinese threat which provided the impetus for Japanese concessions to the United States. The loss of "issue linkage" thus increases the independence of Japanese foreign policy.

Phase One Stable Marriage between the U S . and Japan

3

Phase Two The U S . is the pivot in the Romantic Triangle

3

Phase Three Amity Among Three States

Figure 2-2: Three Phases in the Sino-American-Japanese Triangle Copyright 2003 by Taylor & Francis Books, Inc.

The Alliance Dilemma and the Structural Dynamics of Triangles China-Japan Relations Enmity

U.S.-Japan Relations

3

U S . Issue Linkage to Japan

3

U.S. Issue Linkage Lost

3

15

Japanese Foreign Policy toward the U S . Japanese Subordination

Japanese Increased Inde~endence

Figure 2-3: Sino-Japanese Relations and the U.S.-Japan Relationship

The application of a structural model of "triangles" to Sino-AmericanJapanese relations illuminates how the U.S.-Japan relationship in the Nixon period was entangled with Sino-American relations. In contrast to the Sino-Soviet split within the 1960's Sino-U.S.-Soviet triangle, Japan had no reason for abhorring the PRC after Nixon's announcement. In the SinoAmerican-Japanese triangle, China had been attractive for Japan as a market in the postwar period. The U.S. opening to China prodded the Japanese government to normalize its relations with the PRC, and the negotiation between the two states provided the U.S. government with fears of a SinoJapanese "Stable Marriage."

Both the concepts of the "alliance dilemma" and the "triangular relationship" consider the impact on state policies of changes in international systemic configurations. While both of these structure-based models depict how multipolarity increases the difficulty of managing positive relationships among states, each suggests different strategies for allies seeking to resist the control of a more powerful partner. Explicating these differences can enable the two theories to be integrated, with one theory explaining what the other does not. The following first assesses the utility of the "alliance dilemma" for examining how the U.S.-Japan "bilateral" relationship was altered by the Sino-U.S. accommodation, and, second, how the dynamics of "tripolarity" can shed light on the Sino-American-Japanese "trilateral" relationship. The "alliance dilemma" compares the differences in risks of alliance management between bipolar and multipolar systems. It argues that in a bipolar world, the superpower's allies need to fear only entrapment. As stated above, the weakness of fears of abandonment enables the superpower's allies to pursue substantial autonomy within an "alliance game." In a more multipolar world, a "dilemma" of fears between abandonment and entrapment increases the difficulty of allies' pursuit of autonomy. The

Copyright 2003 by Taylor & Francis Books, Inc.

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Alliance in Anxiety

"alliance dilemma" depicts the dynamics of how a more powerful state can subordinate weaker allies' policy goals to its interests.15 However, the "alliance dilemma" does not capture the wider range of options which characterizes a multipolar world. For example, a dominant state can manipulate its allies' fears by playing off one ally against another. Nor does the theory suggest how an ally in the "alliance dilemma" might recover its autonomy from a more powerful partner. If a strategic triangle exists, a weaker ally can allay its fears both of abandonment and entrapment without ending the alliance, by seeking to establish a stable partnership with the third state. Understanding that possibility for diplomacy requires a grasp of the structural logic of "triangles," which delineates which position in a triangle is the mostlleast advantageous for each of the three actors. In the structural model of "triangles," there are two configurations which the theory on "alliance dilemma" does not identify. First, the "Romantic Triangle" in Dittmer's model illustrates the value of the "pivot" which can play the others off against each other. While describing state A's fear of abandonment, the "alliance dilemma" does not reveal whether a more powerful state B really intends to abandon A. A is driven into becoming the isolated "pariah," should B establish a "Stable Marriage" with the third state C. A becomes a "wing," unless B intends to abandon A. In this sense, the structural model of "triangles" provides a more specific picture of abandonment dynamics in the "alliance dilemma." Second, the model of "triangles" illustrates the possibility of collaboration by the two actors played off against each other by a more powerful state. Exploring how ally A can enjoy leverage over ally B by manipulating the twin fears of abandonment and entrapment, the theory of the "alliance dilemma" assumes as given that B has a negative relationship with A's adversary C. It does not explore possible amity of B and C, in response to A's pursuit of leverage over B. In the case of the U.S.-Japan relationship, the "alliance dilemma" explains that Nixon's opening to China heightened fears of abandonment for Japanese leaders, but does not explain the subsequent hasty overtures by the Japanese government toward the PRC, nor demonstrate why the Sino-Japanese normalization process inspired U.S. policymakers with fear of a growing Sino-Japanese collaboration. The above discussion suggests why the following chapters will draw on both the "alliance dilemma" and the logic of "triangles." First, with respect to Phase One, in which Japanese leaders were preoccupied with SinoAmerican ideological confrontation, the model of "triangles" is employed (Chapter 3). Today, it can be documented that the reversion of Okinawa was agreed to in exchange for Japanese concessions on textiles and U.S. reentry of nuclear weapons into the island after the reversion. The quid pro quo suggests that, while exploring ties with the PRC, Nixon and I
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The U.S. contradictory attitude toward the PRC also reflected its overtures to Japan. While planning to return Okinawa in consideration of the future U.S.-Japan partnership, the U.S. government began to treat Japan as an economic competitor which had to concede on textiles. According to the model of "triangles," the U.S. opening to China formed a "Romantic Triangle," in which U.S. leaders utilized China as a threat to draw concessions from Japan, while at the same time it invoked the specter of Japanese military expansion, in order to attain Chinese concessions on the continuance of the U.S. security partnership with Japan (and Taiwan). In this process, Nixon and I
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Alliance in Anxiety

relative independence from the United States. First, in consideration of the future possible fear of abandonment, Japanese leaders began to cultivate new diplomatic relations with other East Asian countries. For instance, notwithstanding intense U.S. objections, Premier Sato sent Foreign Ministry officials to Hanoi with an eye to normalizing relations with North Vietnam. Second, with regard to economic negotiations with the United States, the reduction in its fears of abandonment made it possible for the Japanese government to avoid appreciating the dollar-yen exchange rates until early 1973. The combination of the two theories delineates the dynamics of the Sino-American-Japanese triangle, illuminating why Japanese leaders reacted as they did to the U.S. opening to China, as well as the Nixon administration's response to the subsequent Japanese negotiating behaviors toward the United States and the PRC. Applying the two international systemic approaches, it is argued that the changes in the international systemic configurations during the period discussed above resulted in the transformation of foreign policy objectives and behaviors within triangles, and substantially account for the Japanese government's successive shifts in relations with the United States: from relative autonomy (Phase One), to submission (Phase Two), and finally to a renewal of foreign policy independence (Phase Three). The following four chapters provide a case study of the above argument, by applying the models to Sino-American-Japan triangular relations from the late 1960's through the early 1970's. The purpose of the following case study is to what extent the structural argument of "alliance dilemma" and "triangles" can explain state behavior when the international systemic structure is in flux, as bipolarity begins to yield toward multipolarity.

NOTES 1IZenneth N. Waltz, Theor)' of International Politics (Menlo Park: Addison-Wesley Publishing Company, 1979),p. 74. X e n n e t h N. Waltz, "Reflections on Theory of International Politics: X Response to My Critics," in Robert 0. ICeohane(ed.), Neorealism and Its Critics (New Yorlt: Columbia University Press, 19861, p. 329. T M . Destler, "Organizational Approaches and their Foreign Policy Impacts: The 'Nixon Shocks,"' mimeo, 1974. Recentl!; Judith Goldstein and Robert 0 . IZeohane argued that it was important to study foreign policy making in terms of policymakers' ideas and learning. In response to their argument, Rohert J e r ~ i seinphasized a need to explore the sources of the ideas as well, contending that "it is trivially easy after the fact to take any behavior or policy and point to its intellectual antecedents." Considering Jervis' criticism, Part I1 in this study pays attention not only to the documentation of specific issues and policies, but also to the perceptions of policymakers in the three countries. Judith Goldstein and Rohert 0. ICeohane(eds.), Ideas and Foreign Policy: Beliefs, Institutions, and Political Change

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(Ithaca: Cornell University Press, 1993); Robert Jervis, "Book Reviews; Ideas and Foreign Policy: Beliefs, Institutions, and Political Change," Political Science Quarterly, Vol. 109, No. 5 (Wintel; 1994-951, pp. 908-9. 4I<ent E. Calder, "Japanese Foreign Economic Policy Formation: Explaining the Reactive State," World Politics, Vol. 40, No. 4 (July, 1988), pp. 517-41. jGlem H . Snyder, "Alliance Theory: A Neorealist First Cut," Robert L. Rothstein(ed.), T h e Evolution of Theor)' in International Relations (South Carolina: University of South Carolina Press, 19921, pp. 8.3-10.3 6With respect to the "alliance formation," see, for instance, Mancur Olson and Richard Zeckhausel; "An Economic Theory of Alliances," Review of Economics and Statistics, Vol. 48, No.3 (1966), pp. 266-79; Stephen M . Walt, Origins of Alliances (Ithaca: Cornell University Press, 1987). 'Glenn H. Snyder, "The Security Dilemma in Alliance Politics," World Politics, Vol. 36 (19841, pp. 462-66. Wnlike West German!; which supported U.S. containment by expanding its own military power, Article 9 (the Peace Clause) of the Japanese Constitution provided legal restraints 011Japan's military budget. Hence, successive Japanese governments depended on the U.S. provision of security and could concentrate on economic growth. Article 9 of the Japanese Constitution declares that "the Japanese people forever renounce war as a so~ereignright of the nation and the threat or use of force as means of settling international disputes. In order to accomplish the aim of the preceding paragraph, land, sea, and air forces, as well as other war potential, will never be maintained. The right of belligerency of the state will not be recognized." YSnyder, "The Security Dilemma in Alliance Politics," p. 466. IoThe U.S. retrenchment from Asia and the prospecti~eemergence of a political vacuum inspired both U.S. and Chinese leaders with fear of Japanese nuclearization. As docuinented in Chapter 3 and 5, Nixon and I
Copyright 2003 by Taylor & Francis Books, Inc.

CHAPTER THREE

THE EMERGENCE OF THE SINO-AMERICAN-JAPANESE "ROMANTIC TRIANGLE"

THECHINESE THREAT: THEREVERSION OF OKINAWA AND U.S. NUCLEAR WEAPONS In the late 1960's, the foreign policy priority for the Japanese government was the U.S. reversion of the Okinawa islands. After becoming prime minister in 1964, Eisaku Sato sought to discuss the issue with the U.S. government. The goal, however, was incompatible with U.S. global containment strategy. The Johnson administration at that time utilized the island as the most crucial military base for the U.S. involvement in Vietnam. From the U.S. perspective, the common U.S.-Japanese interest in containment would be jeopardized, if the reversion implied the reduction of U.S. military capabilities. When Nixon became president, the new Administration's primary initial goal in foreign policy was an "honorable retreat" from the Vietnam War. Compared with Vietnam, Nixon did not first regard the Okinawa reversion as an important issue. The Joint Chiefs of Staff (JCS) continued to assert the strategic importance of the island even after the U.S. withdrawal from Vietnam, insisting that it would be necessary to protect U.S. allies from future communist threats. Moreover, some of them noted that Okinawa was a symbol of U.S. victory in World War 11. In the face of the Vietnam War and the perceived Chinese threat heightened by its development of nuclear weapons in the 1960's, it was axiomatic for the military and hawkish congressmen supporting the JCS's position to support the maintenance of the island as the most crucial base of the U.S. strategy in East Asia.2 Even if the U.S. government agreed to the return of Okinawa to Japan, whether the reversion would include elimination of U.S. nuclear weapons was another issue. For the Japanese people who had been attacked with nuclear weapons in World War 11, the crucial issue at the time of the reversion was the status of the weapon known as MACE-B. In December, 1967, Copyright 2003 by Taylor & Francis Books, Inc.

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Premier Sato promoted "three non-nuclear principles" in the Diet, in which Japan would make it a rule not to possess nuclear weapons, manufacture nuclear weapons, or allow the introduction of nuclear weapons into Japan. Applying the principle to the island, he sought to couple the reversion to the U.S. withdrawal of nuclear weapons. In opposition to the Foreign Ministry, which argued for conceding the nuclear issue in order to achieve the U.S. reversion, Sato made a clear statement, at the March, 1969, Finance Committee of the House of Councilors, that the reversion should be carried out "on a homeland basis, without nuclear weapons."3 American and Japanese Perceptions toward the PRC In terms of security in East Asia, whether the U.S. government would agree to the return of Okinawa, and whether nuclear weapons would be eliminated from the island, depended largely on how both U.S. and Japanese leaders perceived the Chinese threat. During the period between Nixon's inauguration and his announcement of an opening to China, American and Japanese official statements regarding the PRC contrasted dramatically. The U.S. attitude was somewhat contradictory. During its first term, the Nixon administration shifted U.S. policy toward the PRC, announcing the achievement of rapprochement in 1971.4Until it was adequately confident of Chinese intentions on the accommodation, however, the Nixon administration continued to emphasize the Chinese threat, just as the Johnson presidency had done during the Vietnam War.' At a press conference in 1970, Nixon stated: Ten years from now the Communist Chinese, for example, among others, may have a significant nuclear capability. They will not he a major nuclear power, but they will have a significant nuclear capability . . . It will he Yery important for the United States t o have some kind of defense so that nuclear blackmail could not be used against the United States or against those like the Philippines with which the United States is allied in the Pacific, not to mention Japan.6

At press conferences, Nixon advocated a need to develop an anti-ballistic missile (ABM) system, in order to provide "a program of safeguard against any nuclear attacks by the Chinese Communists that we can foresee over the next 1 0 years."' In contrast to President Nixon's official hostility to the Communist Chinese, Premier Sato's attitude was more modest. Right after becoming prime minister in 1964, Sato stated, "It is impossible for us to say that 'there are two Chinas.' Better or worse, the Japanese government made a peace treaty with Taiwan, but I don't think Chiang hi-shek's generosity [of renouncing China's right to war reparations after World War 11] will constrain our relations with mainland China now. I appreciate Chiang's kindness, but we shouldn't consider the issue only in terms of such emoCopyright 2003 by Taylor & Francis Books, Inc.

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tions.""oine leaders in mainland China welcomed such a pro-Chinese statement by Sato, expecting Sino-Japanese relations to expand from only non-governmental economic ties to a more formal diplomatic relationship. Other factors, however, weighed heavily against that outcome. The U.S. involvement in Vietnam, and Japan's need to support the war under the banner of the U.S.-Japan relationship, did not allow Sato to pursue a proChina policy. In Sato's view, nothing was more important than the Okinawa reversion. Judging from the Premier's pursuit of the reversion by cooperating with the U.S. containment strategy, the U.S. advocacy of the Chinese threat prevented the Sato cabinet from simultaneously pursuing positive relationships with the United States and the PRC. For Chinese leaders, however, Sato's emphasis on the U.S.-Japan relationship precluded a warming of Sino-Japanese relations, given American leadership of "imperial capitalism." When the Sato cabinet rejected a plan to export heavy industrial machines to the PRC in February, 1965, the Chinese government criticized Japan's attitude, and relations between China and Japan deteriorated.' The fact that none of Japan's opposition parties could maintain positive relationships with the PRC also kept Sino-Japanese relations estranged. Before the 1960's, the Japan Communist Party (JCP) maintained cordial relationships with both the Soviet Union and the PRC. In the face of the Sino-Soviet dispute in the 19607s,the JCP sought a policy of "autonomy and independence" from the two communist countries, with an eye to avoiding entrapment in the dispute. The JCP's attitude, however, was viewed as pro-Soviet by the Chinese, and pro-Chinese by the Soviets. In 1963, the Soviets criticized the JCP for its statement supporting the Chinese development of nuclear weapons, and the criticism ended their friendly ties. Even after that event, the JCP sought to restore its relations with the Soviets, but this pro-Soviet attitude only served to antagonize Chinese leaders. In 1966, when a delegation from the JCP visited Beijing, the two parties could not concur on whether they should treat the Soviet Union as an adversary. For the Chinese, viewing both the United States and the Soviet Union as major enemies, the JCP's policy of considering the Soviet Union as a friendly nation was far from acceptable. The different attitudes prevented the two parties from concluding a joint communique, and the failure of the meeting finally led to the termination of their relationship. Eventually, no political party in Japan was able to maintain friendly relationships with the PRC. '0 The U.S. emphasis on the PRC threat affected the joint communiqu~sat official U.S.-Japan meetings. In the November, 1969 summit, President Nixon and Premier Sato "shared the hope that Communist China would adopt a more cooperative and constructive attitude in its external relations." In October, 1970, they concurred that "both governments will continue close consultations on questions of China." In accordance with these communiques, Premier Sato and Foreign Minister Kiichi Aichi often emphasized the Chinese threat in the Japanese Diet. For instance, Aichi said in Copyright 2003 by Taylor & Francis Books, Inc.

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Alliance in Anxiety

early 1969 that "we should pay attention to the fact that despite Japan's hope, Communist China has been developing nuclear weapons, which will threaten us in the future."I1 As the Sato cabinet made similar statements, the Chinese government increasingly condemned Japan as a "U.S. puppet," abandoning its incipient effort to build a closer friendly relationship with the Japanese. Under the banner of the U.S.-Japan security relationship, the Sato cabinet simply could not contemplate a drastic change in its China policy. 12 As long as leaders of both states emphasized the Chinese threat in their communiquCs, it was difficult for the U.S. government to agree to the reversion of Okinawa. Instead of stressing the strategic importance of Okinawa as a U.S. military base, Japanese leaders, and some U.S. officials who supported the early reversion, tried to emphasize the importance of the entire U.S.-Japan relationship. Sato repeatedly stated that the reversion would preserve overall U.S. military capabilities, while improving the U.S.Japan relationship. In the U.S. government, those who supported the reversion persuaded the JCS that "not to agree to reversion [would] risk jeopardizing the entire security relationship" with Japan.l3 In the late 1960's, not only growing number of Americans but also most Japanese people opposed the Vietnam War. Demonstrations in Japan criticized the U.S.-Japan Security Treaty, which had guaranteed the provision of Japanese territory for U.S. military bases and facilities. Some officials in the U.S. government were concerned that the Japanese government would fail to extend the U.S.-Japan Security Treaty, which was scheduled to expire in 1970. Specifically, Deputy Assistant Secretary of Defense Morton H. Halperin (later NSC staff member in the Nixon administration) and State Department Country Director for Japan Richard E. Sneider were afraid of the anti-U.S. movement among Japanese people, and sought to alter the military's stubbornness.~~ In retrospect, the rhetorical emphasis on the importance of the U.S.Japan relationship in the late 1960's signalled growing U.S. interest in an expanded Japanese regional role in East and Southeast Asia. Already in his presidential campaign, Nixon supported the return of Okinawa, provided that Japan assumed some leadership in the Pacific area: Long-range, I think the policy of the United States should be that Olzinawa should be returned to Japan . . . [Tlhe interests of Japan and Asia of a free, strong Japan are interests of a free, strong United States in the Pacific. And I think that once Japan assumes the role of leadership, that Okinawa could certainly be returned.15

Nixon's plan to stimulate a more active Japanese role in East Asia derived from the fact that Japan's economy was sufficiently developed in the late 1960's to share the costs of American policy in Southeast Asia. The Nixon administration expected the Japanese to provide economic assis-

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tance to the region (e.g., the establishment of Asian Development Bank), with an eye to restoring their economies after the Vietnam War. Japan's economic contribution provided an incentive for the U.S. government to agree to the reversion of Okinawa, because it substituted, in a sense, for the provision of Japan's territory for U.S. strategic use.'6 The Reversion of Okinawa: Decision-making and Diplomacy The actual process of decision-making and U.S.-Japan negotiations regarding the reversion of Okinawa started in 1967. Early in Johnson presidency, U.S. involvement in Vietnam increased the value of Okinawa. The JCS created the "blue sky" position, meaning that the reversion should not occur until there were no clouds in the sky, that is, until no threats to peace and security existed in Asia. Nobody in the U.S. government expected that the situation would occur soon. In terms of the East-West ideological confrontation, the reversion of Okinawa was supposed to impair the overall interest of the U.S. containment strategy.'' Morton H . Halperin and Richard Sneider opposed the "blue sky" position, concerned that the U.S. government would not be able to renew the Security Treaty in 1970.'8 In an August 7, 1967, memorandum sent to Defense Secretary Robert McNamara, Halperin stated the dangers to U.S. security objectives in East Asia resulting from the failure to extend the treaty. He argued that the most prudent action for the United States was to agree to the reversion of Okinawa, which, however, would not include giving up the military bases on the island.19 Halperin and Sneider also conducted informal lunch meetings with JCS staff, in order to educate them on the need for the early reversion. After a series of conversations, Halperin sent a memorandum to the JCS, asking about the possible consequences for the military functions performed on the base, should the reversion be carried out. As a result of an informal exchange of opinions, the JCS responded that it would be possible to use the bases without any reduction of military capabilities, even if administrative rights of the island were returned to the Japanese g0vernment.~0 Two U.S.-Japan summits were held to discuss the reversion. First, in October, 1967, the Johnson-Sato meeting established a date when the two governments would agree to the reversion. Before the meeting, Sato sent his personal envoy, Kei Wakaizumi, to Washington, in order to discuss the procedure of the meeting.2' Walt Rostow, Special Assistant to the President in National Security, and Wakaizuini agreed that President Johnson would be able to persuade the JCS to consider the reversion of Okinawa, provided that Premier Sato: (1)announced official support for the U.S. involvement in the Vietnam War, (2) proposed to redress the U.S. negative balance of payments, and ( 3 ) decided to provide economic assistance to Southeast Asian countries. With some modifications, Sato agreed to the three condi-

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tions, and succeeded in announcing in the final communique that both governments would decide the reversion of Okinawa within a few years: The President and Prime Minister franlzly discussed the Ryulzyus . . . The Prime Minister emphasized the strong desire . . . for the return of administrative rights over the Ryukyu Islands to J a p a n . . . H e further emphasized that an agreement should he reached between the two governments within a few years on a date satisfactory to them for the reversion of these Islands.2'

The 1967 meeting implied a dramatic change in the overall U.S.-Japan relationship. Before that meeting, relations between the two countries had been dominated by Cold War logic. As long as the U.S. government regarded Okinawa as vital, there was no opportunity for Japan to discuss its reversion. However, the Johnson-Sato meeting indicated that both states could find a common goal other than the Japanese provision of territory. In this more equal relationship, the U.S. military's "blue sky" position was only to invite Japanese citizens' contestation, which would jeopardize the entire U.S.-Japan relati0nship.~3 O n Nixon's inauguration day, the National Security Council issued National Security Study Memorandum (NSSM) 5, which described a need to reappraise U.S. policy toward Japan, in which Okinawa was high on agenda.24 In April, 1969, the reports on Okinawa by the National Security Council (NSC) review group, organized by NSSM 5, were passed on to the National Security Council. At the NSC, no major objections were raised to the reversion, although the question of nuclear storage was left to the President for decision on the basis of the negotiations with Prime Minister Sato later that year. If the military plea for retaining nuclear storage was to be overruled by political factors, the decision would be most acceptable for the JCS if it came from the President. Therefore, the final decision on nuclear storage was to be made at the Nixon-Sato meeting.2j After collecting option papers based on NSSM 5, the NSC issued NSDM 1 3 on May 28, entitled "Policy toward Japan," which described three principles of negotiations regarding the Okinawa reversion: 1. Our willi~lgnessto agree to reversion in 1972 provided there is agreement in 1969 on the essential ele~nentsgoverning U.S. military use and p r o ~ i d e ddetailed negotiations are complete at that time. 2. Our desire for maximum free conventional use of the military bases, particularly with respect to Korea, Taiwan and Vietnam. 3. Our desire to retain nuclear weapons on Olzinawa, but indicating that the President is prepared to consider . . . the withdrawal of the weapons while retaining emergency storage and transit rights, if other elements of the Okinawan agreement are satisfactory.26

It was clear in NSDM 1 3 that Japan's request for reversion with "a homeland basis, no nuclear weapons" was incompatible with the U.S. governCopyright 2003 by Taylor & Francis Books, Inc.

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ment's "desire to [retain] emergency storage and transit rights [of nuclear weapons]. " To seek a compromise, Sato sent his personal envoy Wakaizuini back to Washington. Since the decision on nuclear storage was left to the President and the Prime Minister at their meeting, the Premier needed Wakaizuini to negotiate directly with the White H o u ~ e . ~For ' Sato, it was desirable not to have any kind of secret agreement regarding "emergency storage and transit rights" of nuclear weapons. Technically, the U.S.-Japan Security Treaty had introduced the prior consultation system in 1960 (when the treaty was first renewed), calling for the U.S. government to consult the Japanese government regarding use of Japanese territory for military purposes. That system, however, posed a dilemma from the very beginning. If the Japanese government rejected the U.S. request, the foundation of the treaty, which guarantees the U.S. provision of security to Japan, is negated. Conversely, if the Japanese government always allows the U.S. use of Japanese territory, the consultation system becomes meaningless.28 NSDM 1 3 noted the readiness of the Nixon administration to eliminate all nuclear weapons from Okinawa, provided that the Japanese government could guarantee "emergency storage and transit rights." Ignorant of the discussion within the NSC, Japanese leaders were concerned that the U.S. government would not return the island, if Japan insisted on the reversion on a homeland basis, i.e., removal of all U.S. nuclear weapons. It was believed by some that the price of the reversion would be U.S. preservation of nuclear weapons on Japanese territory. Former Premier Nobusuke ICishi, Sato's brother, stated at a news conference that it could not be helped if the Japanese government was forced to accept the Okinawa reversion with nuclear weapons.29 Some Japanese leaders, anxious to realize the reversion at almost any cost, argued that the government needed to accept the preservation of nuclear weapons. In these intense discussions, however, Sato continued to insist that the reversion of Okinawa must be carried out on a homeland basis. At a meeting between Wakaizuini and Halperin in September, 1969 (just before he left the NSC), Halperin suggested, in accordance with NSDM 13, that the U.S. government could eliminate nuclear weapons, provided that the Japanese government would guarantee emergency nuclear storage and transit rights.30 Given that the prior consultation system had generated concern in the Nixon administration over limited use of the Okinawa island after its reversion, Halperin suggested a secret agreement, which he believed could persuade the JCS and hawkish Congressmen that the reversion of the island would not reduce any U.S. strategic capabilities. As of September, 1969, none of Japan's leaders, including Wakaizumi, knew that President Nixon had expressed his willingness to withdraw nuclear weapons from Okinawa in the May NSC meeting. In order to guarantee reentry of nuclear weapons to Okinawa, the Nixon administration kept the decision of NSDM 1 3 confidential, and pursued a secret agreeCopyright 2003 by Taylor & Francis Books, Inc.

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Alliance in Anxiety

inent with the Japanese government. At the Department of State, some U.S. officials also argued for a secret agreement. For instance, Secretary of State William Rogers suggested to the President that "we will be able to carry on virtually all our current military operations, although you will probably have to agree with Sato on the removal of nuclear weapons. To compensate for this removal we hope to obtain Japanese agreement (which may be hard to get and would probably have to be secret) to permit reintroduction of nuclear weapons.":' Their concern over nuclear weapons, specifically MACE-B, was based on the fact that "inability to store nuclear weapons would somewhat degrade our deterrent in the Far East and lead to some reduction in reaction time." 32 In accordance with Halperin's suggestion, Wakaizumi proposed to Kissinger a secret agreement on U.S. emergency reentry of nuclear weapons. They wrote the following memoranda: one regarding procedural arrangements for the ineeting, and the other on U.S. reentry of nuclear weapons in time of emergency. The former indicated how the President and the Prime Minister would sign the secret agreement: At the end of the meeting, President Nixon will suggest that Prime Minister Sato join him in the small office adjacent to the Oval Office t o look at some objet d'art. Eoth will retire to the small office, close the door and both leaders will sign the secret Minute covering the nuclear question. Copies will be provided to each (Tab E).33

The latter memorandum (Tab E) represented the contents of the secret agreement regarding the U.S. reentry of nuclear weapons even after the island was returned to Japan. The following is the agreed minute for the November, 1969 ineeting: United States President-[I]t is the intention of the United States Government to remove all the nuclear weapons from Olzinawa by the time of actual reversion of the administrative rights to Japan . . . Howe~el;in order to discharge effectively the iilternational obligations assumed by the United States for the defense of countries in the Far East including Japan, in time of great emergency the United States Government will require the re-entry of nuclear weapons and transit rights in Olzinawa with prior consultations with the Government of Japan. The United States Government also requires the standby retention and activation in time of great emergency of existing nuclear storage locations in Okinawa: Kadena, Naha, Henoko and Nike Hercules units. Japanese Prime Minister-The Government of Japan, appreciating the United States Government's requirements in time of great emergency stated above by the President, will meet these requirements without delay when such prior consultation takes place.3"

These memoranda were used to persuade the JCS and hawkish Congressmen to couple the reversion of Okinawa with the elimination of nuclear weapons. After Wakaizumi's book was published, some American retired

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military officials confessed in newspapers that they had heard about the agreement from I
THEU.S. ISSUELINKAGE: THEREVERSION OF OI
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In the Nixon presidency, the reappraisal of economic relations with Japan was one of the issues raised in NSSM 5 . 3 9 Although far from specific, the memorandum indicated readiness to demand economic concessions from the Japanese, noting their enjoyment of rapid economic growth stemming from the Vietnam War. Already in 1969, several documents indicated mounting U.S. irritation and uneasiness regarding economic relations with Japan. For instance, the Department of the Treasury was afraid of large trade deficits, blaming U.S. allies including Japan: The deterioration in our trade balance can be ascribed mainly to three countries, Canada, the Federal Republic of Germany and Japan. These countries accounted for $3.8 billion of the $4.5 billion deterioration hetween 1965 and 1968 . . . The most troublesome aspect of the problem is that, short of Japan malting it a national goal to increase its imports from the United States, our trade relations with Japan will proceed o n an inevitable collision course . . . A11 of our diplomatic efforts must be aimed at getting Japan to adopt no less than a national policy of seeking out and encouraging imports (particularly of ~nanufactured goods) from the United States. Otherwise, Japan will put in jeopardy its most important marltet, the U.S. marltet. Nothing less will suffice.40

Attributing the U.S. trade deficits to Japan's national policy encouraging exports, the Central Intelligence Agency (CIA) explored Japan's domestic characteristics in 1969, reporting that the U.S. deficits were caused by Japan's uniquely closed market: [Japanese] liberalization was carefully limited to products in which the Japanese unquestionably have a comparative advantage . . . Tokyo protects its domestic economy from foreign competition far more than any other industrial country . . . Tokyo's import policy is likely to remain one of purchasing only what cannot he produced at home . . . The inability to penetrate Japanese markets despite reduced formal restrictions is likely to exasperate Japan's trading partners.4'

The balance of trade deficit was in fact contributing to an impending international monetary crisis. Ever since Bretton Woods in 1944, the international financial system had been based on the American dollar, whose value had been backed by the convertibility of dollars into gold. By the late 19607s, growing trade deficits had led to the accumulation of dollars abroad, to a point that their value outstripped the U.S. government's supply of gold. Given the situation, the only choices appeared to be to allow a collapse in the value of the dollar, or to halt convertibility into gold. In the Nixon presidency, the Department of the Treasury began to consider a realignment of the exchange rate: We should advise Japan that we will expect cooperation in any world wide realignment of exchange rates which may come out of the present European situation. We should inform Japan that we feel that the present

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relationship between the dollar and yen is not suitable for the development of a lasting, healthy trade selationship.~~

Although some measures for defending the dollar had been carried out since the Kennedy presidency, the Nixon administration started to consider a drastic change in U.S. monetary policy. The new presidency planned to bring the gold-dollar exchange to an end, and to conduct a realignment of the exchange rate with the major countries of the Bretton Woods regime. From the perspective of domestic politics, the Nixon administration had grown tired of preserving the established monetary regime, which subordinated United States interests to the objective of sustaining international financial stability.4: O n Nixon's inauguration day, the NSC issued NSSM 7, in which the President directed the creation of a permanent Working Group to "prepare a paper on U.S. international monetary policy for early consideration by the National Security Council . . . It should consider our policy alternatives with regard to the U.S. balance of payments, the functioning of the international monetary system, and contingency plans for response to potential currency crises such as a franc devaluation and/or British resort to a freely flexible exchange rate for the pound."44 This memorandum indicated the new Administration's readiness to lessen U.S. "economic" responsibilities for its allies, along with the reduction of "strategic" overcommitment in East Asia represented by the Guam Doctrine. Aside from these general shifts in the U.S. position, a particular problem was looming on the horizon: the rapid decline of the American textile industry in the face of Japanese exports (to be discussed below). That issue was to provide a flashpoint in U.S.-Japanese relations. Differences in Perceptions between the U.S. and the Japanese Governments While the new Nixon administration began to reappraise its overall policy toward Japan, Japanese leaders were ignorant of the change in the U.S. perspective on monetary and trade policy. They took it for granted that Japan would continue to be the most important East Asian outpost for American Cold War strategy. As far as security was concerned, they deferred to the U.S. view that Communist China provided a threat to East Asia. Although recognizing a need to "improve Japan's relations with the continental Chinese," Sato continued to emphasize in the Diet that "today's Chinese have many problems to be solved. They are still far from reliable enough to establish diplomatic relations with us, and to have mutual understandings and cooperation."4' Believing that the U.S.-Japan partnership had an overriding common interest in containment, Japanese leaders assumed that the U.S. government would not fail to notify Japan of any radical changes in its China policy under the banner of the U.S.-Japan relationship.46 Copyright 2003 by Taylor & Francis Books, Inc.

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Japanese confidence in the United States manifested itself in the economic area too. During the first two decades of Cold War history, the U.S. government opened its market to absorb its allies' products. Growing accustomed to the U.S. provision of economic guarantees, Japanese leaders in the 1960's believed that the "mutual trust" stemming from the U.S.-Japan security relationship would never fail to provide stable economic ties. They regarded the Okinawa reversion as a symbol of the strong bilateral relationship, and downplayed problems in the economic area. Sato assumed that Japan's large trade surplus was only temporary, and that his statements supporting U.S. involvement in Vietnam could substitute for economic concessions being requested by the United States.4' As far as the textile dispute was concerned, Sato was optimistic that he could avoid implementing the concessions. During the negotiating phase of the Okinawa reversion, Sato often stated that "the most important thing for Japan is the mutual partnership with the United States." He believed that security relations between the two countries had to be maintained at any burden, costs which the U.S. government would be willing to bear in the interest of preserving East Asian security.48 Moreover, Sato complained of a contradiction in Nixon's statements, in which the Administration was demanding Japan's restraint in textile exports, while at the same time insisting on reducing tariffs and opening Japan's monetary market.49 In textile negotiations, officials in the Ministry of International Trade and Industry (MITI) and the textile industry suggested that Sato had no need to concede, since the U.S. government was unable to demonstrate serious injury to U.S. industry caused by imports from Japan20 For the Nixon administration, however, textiles were a significant domestic political issue. In his presidential campaign in November, 1968, Nixon sought the textile industry's support in the South by expressing concern over: the impact of dramatically increasing imports on the 2.4 million people directly employed in the Nation's textile and apparel industries . . . As President, my policy will be to rectify this unfair de~elopmentand to assure prompt action to effecti~elyadminister the existing Long-Term International Cotton Textile Agreement. Also, I will promptly take the steps necessary to extend the concept of international trade agreements to all other textile articles involving wool, man-made fibers and blends.jl

In the election, he defeated Democratic Vice President Hubert Humphrey by a margin of only 0.5% of the popular vote. That narrow victory persuaded Nixon that he had to begin preparations for the 1972 campaign as soon as he entered office in January, 1969. While emphasizing at a press conference that "the interest of the United States and . . . of the whole world will best be served by moving toward freer trade rather than toward protectionism,"j2 Nixon answered, in response to a question on

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import quotas, "[The quota] of shoes or a basket clause would lose us more jobs, while the textile quotas will save jobs."j3 It was clear from the outset that Nixon's policy on textiles contradicted the U.S. advocacy of free trade. He sought to justify the restraint on textile exports by appealing to the threat to American jobs, which presumably made the issue exceptional: I take a dim view of [the] tendency to move toward quotas and other methods that may become pertinent . . . As far as the textile situation is concerned, that is a special problem which has caused very great distress in certain parts of this country, and to a great number of wage earners, as well as those who operate our textile facilities.54

After Nixon's inauguration, the agenda on textiles initially had nothing to do with the return of Okinawa. While recognizing that textile exports from Japan, Taiwan, and South Korea would damage the U.S. industry, there was no definite plan, as of January, 1969, to link Japanese concessions on textiles to the reversion of the Okinawa. Premier Sato was also unsure, during 1969, how much the Japanese government would have to concede over textiles. The two issues were totally separate for Sato as well. In the White House, the two agendas remained separate in early 1969. The NSC discussed a need to reform economic policy toward Japan in January, but no specific agenda was decided. According to Halperin, the NSC gave priority to the maintenance of the security relationship with Japan, downplaying economic issues. The return of Okinawa had been discussed already during the Johnson presidency, while the economic relationship seemed too ambiguous to determine specifically what should be negotiated with the Japanese government. The reference to "Economic Policy" in the memorandum included, but was not limited to, the textile issue at that time.55 Independently of the NSC, the Department of Commerce-responsible primarily for the textile industry's interests-carried out negotiations with East Asian countries. In May, 1969, Secretary of Commerce Maurice H . Stans visited Japan, South Korea, Taiwan, and Hong-Kong to discuss their voluntary restraints on textile exports. In his negotiation with MITI Minister Masayoshi Ohira, Stans stressed the importance of the textile industry to the United States, and the social consequences of unemployment there. He claimed that the U.S. textile deficit was 800 million dollars in 1968, half of it due to Japanese imports, and that the continuation of current trends would severely damage the U.S. industry. Ohira countered that the increase in U.S. textile imports had not been all that severe, and that relief was open to the United States only under GATT Article 19, the so-called "escape clause." Stans responded that this was not a feasible alternative.56 Despite their differences of opinion, Stans' report after his visit conveyed a rather optimistic view. He expressed a belief that the export re-

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straints were not a serious problem in the long run, and did not demand a rush to compromise with East Asian countries: O n textiles, although I did not receive the support of the four countries I yisited for an international solution, I belieye the Asians now more clearly understand our determination to find an answer to our textile problem. Each country has agreed to continue the dialogue with us."

At that time, the Nixon administration was pursuing not only Japanese but also other states' concessions on export restraints. When Korean President Park was about to visit Washington in August, Peter M. Flanigan, Assistant to the President in Economic Affairs, wrote that "with regard to making progress on the textile matter, I asked Henry IZissinger to suggest to the President that he take up with Park that matter. I told him that if Korea and Taiwan would lead, Japan well might follow."j8 Until the summer of 1969, the White House continued to deal with the textile issue separately from the Okinawa reversion. Wakaizumi's memoir indicates that, in the entire negotiating process of the Okinawa reversion, it was not until September, 1969, two months before the Nixon-Sato meeting, that IZissinger first proclaimed interest in a linkage between the U.S. return of Okinawa and Japanese restraints over textile exports.59 The Okinawa Reversion and Textiles IZissinger proposed the linkage in the September meeting with Wakaizumi, who visited Washington to reach a detailed agreements in preparation for the November U.S.-Japan summit. He showed two memoranda to Wakaizumi: one described U.S. demands that the Japanese restraints on textile exports should cover "all wool and man-made fiber textile products, including blends," and that the restraints should be carried out for " 5 years, beginning January 1, 1970." The other regarded "reentry of nuclear weapons and transit rights in time of emergency but with prior notification," as indicated in the previous section.60 In Sato's mind, the reversion of the administrative rights of Okinawa would strengthen the entire U.S.-Japan partnership. When Wakaizumi showed him IZissinger's conditions for the reversion, Sato was dissatisfied that textiles were linked to Okinawa. O n that day, Sato wrote in his diary regarding textiles: I met with M c Kei Waltaizumi who came back from America. As I thought, I will need to make a few serious decisions [regarding nuclear weapons and textiles]. He told me to concede on the textile issue . . . Today's eyening newspaper reported that the U.S. government would like to have a bilateral textile negotiation with Japan.61

Although understanding Wakaizumi's suggestion, Sato knew that his position would raise difficulties within the Japanese government, if members of the Diet and the textile industry heard that Sato had made a secret agreeCopyright 2003 by Taylor & Francis Books, Inc.

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ment without any consultation. He also coilcluded conversely that it would be impossible to have Okinawa returned, if he did not agree to restraints on textile exports. As the Nixon-Sato summit approached, Premier Sato sent Wakaizuini again to Washington, where he and I
The second memorandum, i.e., Tab A, described specifics of the scenario for implementing the export restraints: 1. During Priine Minister Sato's substantiye meeting with President Nixon he will propose the initiation of US-Japanese bilateral discussion of the textile issue. 2. President Nixon will respond affirmatively and propose that both governments designate two trusted negotiators to conduct secret talks on the textile question. 3. During the bilateral discussion phase the US and Japanese negotiators will arriye at an agreement during the month of December 1969. The agreement would be along the lines of the proposal outlined to Ms. Yoshida on November 12 (Tab A). 4. The bilateral agreement will then be kept secret until after the Japanese elections. Within one month following the elections the US goyerninent will call a meeting of GATT.64

These documents made it clear that Okinawa and textiles were linked confidentially. Nixon was thus able to pursue textile protectionism in secret bilateral talks, even as he stressed the need for "free trade" and "multilateral negotiations" at press conferences. In retrospect, the Japanese government provided more of a quid pro quo than it needed in order to have Okinawa returned. Sato conceded over textiles, allowed full conventional use of military bases, and the reentry of nuclear weapons in time of emergency. After the reversion agreement was reached, IZissinger stated that "we determined that it was more important

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to give up a specific asset like Okinawa in return for the promise of a solid, long-term U.S.-Japanese relationship in the Pacific."Gi This statement certainly indicated the U.S. government's central concern regarding Japan during the late 1960's. The U.S. had now not only realized its aim of extending the security relationship, but Presideilt Nixon had also achieved the additional gain of restraining Japanese textile exports. Moreover, even after the return of Okinawa, the U.S. government's use of the military bases remained unchanged. It transferred only the administrative rights of the island to Japan. U.S. dominance over Japan had apparently again been demonstrated, and the Okinawa-textile deal was a prototype of subsequent U.S.-Japan negotiations, i.e., linking the U.S. provision of security to the Japanese concessions of economies.

THETEXTILE WRANGLE: SATO'SRELUCTANCE TO CARRY OUTTHE DEAL It was one thing to make a secret agreement, but quite another to implement it. By the middle of February, 1970, leaders in the U.S. government realized that the agreement had not been implemented as discussed at the meeting. Although Premier Sato sought to restrain textile exports, the industry's strong opposition to governmental intervention prevented him from adjusting the companies' opinions. The fact that the industry did not receive any subsidies from the government made the task of restraining their exports extremely difficult. In terms of its dollar value, Japanese textile and apparel sales in the U.S. market represented only about one percent of American production in 1969, and about 4 percent of Japanese production. Despite its small scale, both governments behaved as if their textile industries had been of central importance.66 The secret deal placed Premier Sato in a political bind. Leaders in the United States did nothing but to wait for Japan to implement the scenario agreed at the November, 1969, U.S.-Japan summit. I
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quickly reached an impasse. Although Foreign Ministry officials at the Japanese embassy suggested to Shimoda their preference for an "early compromise," the failure of the Sato cabinet to reach a consensus with other ministries compelled Shimoda to reject any U.S. initiative toward an agreement. As negotiations went on, Johnson's requests became more and more specific, and Shimoda was at a loss why he raised such detailed demands. Finally, on February 13, Johnson decided to explain the detailed memo (agreed at the Nixon-Sato summit) which had formed the basis of his negotiating position. Shimoda was surprised when Johnson referred to Sato's promises at the meeting, and acknowledged his lack of awareness.@ Since MITI Minister Ohira was more eager to represent the voice of the Japanese textile industry than to reach a compromise with the U.S. government, Sato replaced him with Kiichi Miyazawa in January, 1970. In reshuffling the cabinet, Sato believed that, due to his prior personal relationships, Miyazawa would be more cooperative with both the Premier and the U.S. government in resolving the conflict. Once starting talks with U.S. representatives, however, Miyazawa grew increasingly reluctant to adjust the industry's position. He knew that any agreement regarding export restraints, even if signed by the two governments, could not be implemented without the industry's cooperation. Faced with the opposition of MITI officials and textile companies, Miyazawa was isolated, and increasingly skeptical about the prospects for an early resolution of the problem.'O By March, 1970, the Nixon-Sato agreement had clearly come apart. All important actors on both the U.S. and the Japanese sides were unhappy with the situation. In the United States, President Nixon, the Department of Commerce, and the textile industry were frustrated with the Sato cabinet. So too were American free trade groups. They were concerned that the failure of the negotiations would strengthen the prospects for general import control legislation.'' In Japan, Sato and the Foreign Ministry were troubled by the prospective damage to the U.S.-Japan relationship, should the President conclude that the Prime Minister was reneging on his promise. The secrecy of the agreement constrained Sato's leadership, trapping him between his promise to Nixon and the opposition of a domestic industry, and the result had been a deadlock. During March-April, the Japanese government sought to make a counterproposal. MITI and Foreign Ministry officials drafted an anti-memoire, which spelled out the Japanese government's position. It described Japan's readiness to agree to selective controls provided that the U.S. government proved serious injury resulting from Japanese textile imports. The main purpose of the anti-memoire was to demonstrate Japan's "sincerity" by indicating willingness to offer such concessions that both the Japanese industry and other textile exporting countries might accept. Significant as these concessions may have seemed to the Japanese government, however, they were not so regarded in the United States. The Nixon administration reCopyright 2003 by Taylor & Francis Books, Inc.

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jected the anti-memoir quickly, and the U.S. textile industry came to believe that quota legislation would be the only way to resolve the conflict.'2 Even in this situation, Sato continued to announce that he would "convey to his friend President Nixon his affection as well as determination to place our economic relationship on a healthier basis, specifically regarding the pestiferous textile issue."'^ He understood that he must resolve the conflict, but there was no satisfactory initiative from the Japanese government. Sato persistently avoided confronting the problem, making only indirect moves to encourage the implementation of the deal. When the U.S. government sent Secretary of the Treasury David M . Kennedy to Japan in April to discuss economic issues more generally, Sato said nothing more than the following, according to I<ennedy7saccount: Textiles were the big problem which Japan would keep in mind. However, the textile industries of both countries were run by the same kind of men, who made the same kind of statements. Whenever I thought I saw daylight on this problem here the industry quickly darkened his vision. Perhaps it would be best for the governments to negotiate in top-secret, and then, when an agreement acceptable to both sides had been reached, it could be imposed on the industry in Japan.74

In the face of Japanese inaction, the U.S. Congress began to move toward import legislation. It was Wilbur Mills, Chairman of the House Ways and Means Committee, who took the most significant action. In response to the intense demands from the textile and the shoe industries, and with the support of the majority of his Committee colleagues, Mills submitted on April 1 3 a bill providing for statutory textile and footwear quotas, which was soon known as the "Mills bill." It proposed that the United States limit 1970 textile imports to the 1967-68 average, with future years' increase proportionate to the growth of U.S. domestic consumption. Quotas were to be allocated by country and by category.'' With the movement toward quota legislation in the Congress, Stans' influence and reputation began to decline.'G Although not opposed to the quota solution, he was not satisfied with Congress assuming a dominant role. He pursued a new negotiating initiative by exploiting a back-channel contact with MITI Minister Miyazawa. Miyazawa was also encouraged by the Premier to renegotiate. With both leaders' concerns in accord, the Miyazawa-Stans meetings were held during June 22-24, 1970. At the onset, Stans presented a plan for comprehensive export restraints which would last for five years, while Miyazawa suggested that the restraint be limited to certain items and limited to a year or eighteen months. The two leaders quickly compromised on three years. After meeting with representatives of the textile industry accompanying him, however, Miyazawa withdrew his offered compromise. O n the second day, Stans changed his strategy, and tried to present Sato's 1969 memo which formed the basis of

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the U.S. position. Miyazawa refused to look at it, and the meeting failed to reach an agreement. Both leaders announced that "it is not possible to negotiate an agreement at this time for the voluntary limitation of Japanese textile imports into the United States."" The failure of the meeting exhausted major Japanese officials, while the Japanese mass media applauded the resistance of the government, saying "[tlhe U.S.-Japanese textile negotiation turned out to be the first instance in which Japan reiected a U.S. demand."'" The Second Nixon-Sato Meeting One year passed after the secret deal between the President and Premier. The second Nixon-Sato meeting was to be held in late October. Japanese leaders believed that Nixon, given the need to have domestic support for the midterm Congressional elections, would press Sato for an agreement. Before the meeting, Henry Kissinger made the following talking points after secret consultations with Kei Wakaizumi: Sato will . . . regret his inability to resolve the textile issue . . . Avoid discussing textiles unless he raises the issue . . . We h a x informed the Japanese that you will llot bring up the subject of textiles . . . Based on your last meeting with the Prime Minister, you expected to h a x the issue r e s o l ~ e d long ago . . . We have indicated that you will make response, other than to note his comments, and in no way assuage Sato's conscience on the mattec79

Although touching on the textile issue, the memo emphasized the importance of the entire U.S.-Japan relationship. I
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information only encouraged the industry leaders' stubbornness. In December, Flanigan finally dropped his opposition to the Mills bill which had been submitted to the Congress in April. In response to Mill's view that if an agreement was not reached, the Trade Bill would be passed in a form acceptable to the Administration, Flanigan answered, "while I did not underwrite this course of action, I did indicate that this should be a most effective stimulant to the Japanese in reaching an agreeinent."8: At the moment of the failure of the Flanigan-Ushiba talks, the Nixon administration began to consider the unilateral enforcement of export restraints in cooperation, to some extent, with Congress. The textile industry requested the passage of the Trade Act in the name of "national security." 84 Although yielding to the Democratic Congressman's leadership on trade might seem embarrassing to the Nixon administration, Stans recognized a need for legislative support, in order to reach an agreement with the Japanese: It is now quite clear that our long waltz with the Japanese on textiles is oYer . . . It is e ~ i d e n that t the Japanese G o ~ e r n m e n tcannot deliyes o n its promises to us. Its industry won't permit that . . . [We need to] send to the Congress now a short message requesting enactment of a textile-only hill . . . [and to add] the textile proposal in the Senate to a bill that emanated from the Ways and Means Co~nmittee.sj

Given the fact that the governmental negotiations became deadlocked, the White House looked for a way to gain legislative support. The Administration, however, found that the plan would prove a difficult political issue, when the Japanese textile industry announced its voluntary export restraints. Nixon's Rejection of the Japanese Industry's Voluntary Plan As the year 1971 began, the Japanese textile industry planned its own voluntary export restraints. The idea of export restraints on the part of Japanese industry was anything but new. The industry's leaders came to see some sort of export restraints as necessary, in order to assuage American anti-Japanese protectionist pressure not only on textiles but also on other Japanese products. O n March 8, the Japan Textile Federation announced that the industry would "control exports to the United States of all textile products" for three years. These were to be "aggregate" restraints, with no specific categorical limits. In response to the announcement, the Sato cabinet and other government officials supported the plan, saying that "the Japanese textile industry, on its own judgment, reached the decision on export restraints."86 The White House, however, responded that "the proposed [japanese] solution was not satisfactory and that [the President] found the action of the Japanese government extraordinary."8' Nixon announced the "aggregate" restraints as "totally unsatisfactory." The fact that Wilbur Mills was the most important outside stimulus for the industrial program also annoyed Nixon. Since Mills was considered a strong Democratic political rival of Nixon as a presidential prospect, Copyright 2003 by Taylor & Francis Books, Inc.

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Nixon saw himself being upstaged by Mills' success in achieving export restraints by the Japanese textile industry. Although having no effective alternatives to Mills' initiative, the Nixon administration consequently rejected the Japanese industry's plan. The fact that the Nixon presidency did not react to the failure of the Flanigan-Ushiba talks had provided a major opposition political figure with an opportunity to bypass the formal negotiations between the two governments88 The textile conflict indicated that the intense objections of a domestic industry could prevent both governments from reaching an agreement. The Nixon administration, which first thought that export restraints could be implemented in accordance with a secret exchange for the reversion of Okinawa, increasingly came to view textiles less as an economic issue than as one affecting national security. The problem was complicated by the secrecy of the Okinawa-textile deal, the lack of leadership by Sato, the autonomy of the Japanese textile industry, and Nixon's need for domestic support.

In terms of the basic structure of major power relationships in East Asia, the Nixon-Kissinger strategy changed the Sino-American-Japanese triangle from a U.S.-Japan "Stable Marriage" into a "Romantic Triangle," in which the United States was the "pivot," and China and Japan were the "wings." The transformation of the triangle originated in the secret U.S. approach to the PRC. For Nixon and Kissinger, secrecy had two main goals. First, within the U.S. government, the aim was to prevent the Department of State or domestic opposition from interrupting the initiative. Second, in terms of foreign relations, secrecy would help maintain flexible options in negotiations with the Soviet Union over Vietnam, trade, and arms control. The secret U.S.-Chinese dialogue, however, began to cause a gap in perceptions of the PRC between the U.S. and the Japanese governments. O n the one hand, Japanese officials believed, under the umbrella of the U.S.Japan relationship, that the U.S. government would continue close consultations on questions of China. Until Nixon announced the opening to China, they remained wholly ignorant of the back-channel communications between the two countries. O n the other hand, soon after Nixon had taken office, the U.S. government had reappraised U.S. policy toward China, deregulated economic controls, conducted a study on Chinese representation at the U.N., and sought a diplomatic initiative for improving the two states' relations.89 The gap between official and unofficial U.S. attitudes toward the PRC served to preserve the hostile relationship between the PRC and Japan, while allowing for warm relationships to develop between the U.S. and

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both of the other states. The absence of official communication between the PRC and Japan left Japanese leaders ignorant of the change in American perceptions. The structural model of triangles illustrates how the U.S. government could gain leverage over Japan by exploiting the Sino-Japanese enmity. Assuming that successive U.S. governments needed Japan as the cornerstone of East Asian security, Japanese leaders did not anticipate that Japan would be demoted from U.S. "spouse" in a "Stable Marriage" to the status of a "wing" in a "Romantic Triangle." The "pivotal" position in the "Romantic Triangle" enabled the U.S. government to have leverage over Japan. First, the Nixon administration succeeded in achieving a secret agreement on U.S. reentry of nuclear weapons into Okinawa even after its reversion to Japan. In U.S. domestic politics, the need for the agreement stemmed from the military's reluctance to give up the most crucial base for its involvement in the Vietnam War. In terms of the international balance of power, the U.S. government relied on the right of reentry of nuclear weapons as a hedge against failure in pursuit of a U.S.-China entente. Second, the reversion was linked to Japan's reduction in textile exports. For successive American presidencies, the reversion of Okinawa had originally been related solely to the maintenance of the overall U.S.-Japan relationship. Already in the Johnson administration, the U.S. government conducted a study on changes in U.S. defensive capabilities that would result when the island was returned to Japan. It was only after Nixon became president that restraints on textile exports became an issue. The pressure for Japanese government concessions on textiles was primarily attributable to President Nixon's domestic political needs, which had been originally unrelated to the importance of Okinawa for U.S. involvement in East Asian security. The transformation of a triangular structure from the U.S.-Japan "Stable Marriage" to the "Romantic Triangle" enabled the Nixon administration to maintain leverage over Japan. Unquestioned subordination to the U.S. containment strategy had left Sino-Japanese relations estranged, and enhanced U.S. leverage in the Nixon-Sato negotiations.

NOTES 'Premier Sato had a unique view regarding the reversion of Olzinawa. Before becoining prime ininiste~;he thought that the two superpowers' influence in Japanese t territory still manifested itself in the northern islands occupied by the S o ~ i eUnion, and in Okinawa by the United States. In Sato's mind, the unresol~edterritorial problems were a legacy of Japan's defeat in World War 11, and the pursuit of the reversion implied the restoration of what the Japanese had lost in the was. In the face of domestic constraints on exercising military power stemming from Article 9 of the Japanese Constitution, howevel; Sato sought the territorial r e ~ e r s i o nprimarily from U.S. government. H e thought that it would he risky for the Japanese to request the r e ~ e r s i o nof northern territories from the Soviet Union. That is, Sato's Copyright 2003 by Taylor & Francis Books, Inc.

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goal of the territorial reversion was only within the framework of U.S.-Japan "alliance politics." Minoru Icusuda, Kusuda Minoru Nikki (The Diary of Minoru Kusuda) (Tokyo: Chuo IZoron Publishel; 2001); Hisashi Senda, Sato Naikaku Kaiso (Recalling the Sato Cabinet) (Tokyo: Chuo Koron, 19871, pp. 2-3-32. Triscilla Clapp, "Olzinawa Reversion: Bureaucratic Interaction in Washington 1966-1969," Kokusai Seiji (Tolzyo: Japan Association of International Relations, 19741, Vol. 52, p. 20. 3Senda, Sato Naikaku, pp. 52-54. 4Already in February 1969, Henry Icissinger wrote in a memorandum that "I think we should g i x eyery encouragement to the attitude that this Administration is 'exploring possibilities of rapprochement with the Chinese.' This . . . should be done privately and should under no circumstances get into the public prints from this direction." Memo from Kissinger to the President, February 1, 1969; White House Central Files, Subject Files, Eox 17; National Archives, College Park, MD. 'Nancy Eernkopf Tucker, "Threats, Opportunities, and Frustrations in East Asia," Warren I. Cohen and Nancy Eernkopf Tucker, Lyndon Johnson Confronts the World: American Foreign Policj; 1963-1 968 (Cambridge: Cambridge University Press, 19941, p. 126. 6The President's News Conference, January 30 1970, in George W. Johnson(ed.), The Nixon Presidential Press Conferences (New York: Earl M. Coleman Enterprises, Inc., Publishers, 19781, p. 88. T h e President's News Conference, March 14 1969, in Johnson, Ibid., p. 34. Voshihide Soeya, Nihon Gaiko to Chugoku Uapanese Diplomat)' and China) (Tolzyo: IZeio Ts~ishin,1995), p. 108. Translation by the authoc 9Alzihilzo Tanalza, Nicchu Kankei (Sino-Japanese Relations), 1945-1 990 (Tokyo: Tokyo University Press, 1991), pp. 58-59. The deterioration of PRC-Japan relations ultimately derived from the Japanese government's policy toward Taiwan. Former Premier Shigeru Yoshida ~ i s i t e dTaiwan in 1964 (when Hayato Ikeda was prime minister), and promised with Chiang that the Japanese government would restrain exports to the PRC. Sato's statement in 1965 reflected Yoshida's commitment to the Taiwanese government. IOSoeya, Nihon Gaiko, pp. 1\36-39. 1lKokkai Giji-roku (The Diet Record), January 30, 1969. Translation by the author. 12Public Papers of the Presidents: Richard Nixon, 1969 (Washington, DC: United States Government Printing Office, 1971), p. 452. IXetter from Morton H. Halperin to Go Ito, December 15, 1995; Interview with Halperin, March 20, 1996, Washington, DC. 14Morton H. Halperin, "American Decision Making on reversion of Okinawa: A Memoir," in Okinawa Reversion: Its Long-tenn Significance in US.-Japan Relations-Past and Future-, Seminar held for Commemorative Events for the Twentieth Anniversary of the Reversion of Olzinawa, May 13-14, 1992, Tolzyo, Japan), p p 52-54. IjMemo from IZissinger to President, "U.S. Foreign Policy-Campaign Commitments, 1968," October 9, 1969; White House Special Files, Staff Meinher and Office Files, H.R. Haldinan, Eox 137; National Archives, College Park, MD. 16Yasulzo IZohno, Okinawa Henkan w o Meguru Seiji to Gaiko: Nichibei Kankei-shi no Bunrqaku (Japanese Politics and Diplomacj~in the Okinawa Reuersion: A Historical Context) (Tolzyo: Tolzyo University Press, 1994), pp. 272-74. Copyright 2003 by Taylor & Francis Books, Inc.

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I7Halperin, "American Decision Malting on reversion of Oltinawa," pp. 53-54. 18The U.S.-Japan Security Treat!; originally concluded in 1951, was to be renewed every ten years. The U.S.-Japan summits in 1960 decided, despite intense oppositions of Japanese people, that the Japanese government could have the rights of prior consultations regarding U.S. strategic use of Japanese territory. I9Halperin, "American Decision Malting on reversion of Oltinawa," p. 54. 'OIbid., p. 55. "Wakaizumi recalls that he was hired as Sato's personal e m o y because Sato regarded him as haying strong coimections with major policyinakers in the U.S. government. In fact, Walt Rostow and Morton H. Halperin were friends of his at that time. See, I<ei Waltaizumi, Tasaku Nakarishiwo Shinzemlto Hossu (The Best Coztrse Available), (Tokyo: Bungei Shunju Publisher, 1994), chap. 1. '2Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1967 (Washington, DC: United States Government Printing Office, 19681, p. 10.35. 2Kohn0, Okinawa, chap. 8. 24The Nixon adininistration sought to revitalize the National Security Council (NSC) centered in the White House. It established a system that strengthened the role of the national security advisor by providing him with the power to order directly the State Department and other agencies to prepare option papers on specific subjects designated as the National Security Study Memorandum (NSSM). The NSC's policy decision was to take the form of a classified National Security Decision Meinoraildum (NSDM) written by IZissinger and his staff. See, Seymour Hersh, The Price of Power (New Yorlt: Summit Books, 1983), pp. 26-29. 'jMemorandum of Conversation, "Henry A. IZissinger's Presentation before the Governors of the 5 0 States in the East Auditorium of the State Department," December 3, 1969; White House Special Files, Staff Member and Office Files, A1 Haig, Eox 4 5 (Haig Speech Files); National Archives, College Park, MD; Clapp, "Okinawa Reversion," pp. 34-36. 26NSDM 13, "Policy toward Japan," May 28, 1969; National Security Archive, Washington, DC. Along with the Oltinawa reversion, this memorandum also indicated U.S. readiness to expect Japan's larger role in East Asia. It says that "[wle shall basically pursue our current relationship with Japan as our major partner in Asia, seek[ing] an increasingly larger Japanese role in Asia." 2'Asahi Shinzbun, January 28, 1996. In this recent meinoil; Minoru IZusuda, executive secretary to Sato, made it clear that the Premier used his personal envoy to negotiate directly with the White House. Minoru IZusuda, Kzlszlda Minoru Nikki. '8Seigen Miyasato, "Oltinawa Henltan w o Meguru Sailtin no Kenkyu (Latest Studies on the Okinawa Reyersion)," Kokztsai Seiji (International Relations), Vol. 108 (March 1995), p. 193. 29Wakaizumi, Tasakzt, pp. 221-32. 30Ibid., pp. 342-47. "Memo from Rogers to the President, "Meeting with Congressional Leaders on Oltinawa," November 5, 1969; National Security Archive, Washington, DC. Moreovel; Ainhassador to Japan Arinin H. Meyer suggested before the 1969 Nixon-Sato meeting that "it keeps door open for 'prior consultation' for re-entry of nukes should contingency require. Aichi's language plus priyate assurances from Sato to President that emergency re-entry may be possible is probably optimum result we can hope (or should) for on nuclear issue." Department of State Telegram,

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from Ambassador Meyer to Rogers, November 5, 1969, National Security Archive, Washington, DC. j?Memo from Johnson to Rogers, "Okinawa-Talking Points," Noveinher 13, 1969; National Security Archive, Washington, DC. j3Waltaizumi, Tasaku, pp. 444-45. 3Vbid., p. 447. 3jAsahi Shimbun, April 5, 1996. 36Pztblic Papers of the Presidents of the United States, 1969, p. 955. 3'011 April 27, 1971, IGssinger receiyed a letter from Zhou, saying that "At present contacts between the peoples of China and the United States are being renewed. However, as the relations between China and the U.S.A. are to be restored fundamentally, a solution to this crucial question can be found only through direct disc~issionsbetween high-level responsible persons of the two countries. Therefore, the Chinese G o ~ e r n m e n treaffirms its willingness to receive publicly in Peking a special e m o y of the President of the U.S . . . for direct meeting and discussions." Message from Zhou Eillai to Nixon," April 21, 1971, receiyed April 27, 1971; National Security Archive (http://w~vw.g~vu.ed~i/-nsarchiv, accessed June 15, 2002). 3q.M. Destler, "Oltinawa Reversion as a Turning Point in Postwar U.S.-Japan Relations," in Okinawa Reversion: Its Long-term Significance in US-Japan Relations, pp. 21-24; Kohno, Okinawa, chap. 8. j9NSSM 5, "Japan Policy," January 21, 1969; National Security Archive, Washington, DC. The ineinorandum directed the preparation of a paper on U.S. policy toward Japan, which would evaluate the Oltinawa reversion, U.S. bases in Japan, security treat!; and economic policy. 40Memo from Victor A. Mack, "U.S. Trade Trends and Policies," April 11, 1969; National Security Archive, Washington, DC; Memo from Victor A. Mack from Assistant Secretary of the Treasury John R. Pett!; "Stans Trade Mission to Far East," May 2, 1969; National Security Archiye, Washington, DC. 41Intelligence Memorandum, Japan: The Effectiveness of Inforrzal Import and Investment Controls, Central Intelligence Agency, Ma!; 1969; National Security Archive, Washington, DC. QMemo from Victor A. Mack (fn. 40). 43Joanne Gowa, Closing the Gold Window: Donwstic Politics and the End of Bretton Woods (Ithaca: Corilell Uniyersity Press, 198.31, pp. 171-76. 44NSSM 7, January 21, 1969, cited in Ibid., p. 123. 4jSato's policy speech at the 61st Diet, January 27, 1969, in Seisaku Geppo (Month/)'Policj~)(Liberal Democratic Party), February 1969, p. 10. Translation by the author. 46For instance, H a n Suyin, Eldest Son: Zhozt Enlai and the Making of Modern China, 1898-1976 (New York: Hill and Wang, 1994), p. 379. During the height of the Cold War, Koichiro Asalta, the Japanese ambassador to the United States from 1957 to 1963, warned of a "nightmare" represented by the prospect of Sino-American rapprochement. Until the Nixon period, however, the "nightmare" was discounted by Japanese Foreign Ministry officials. Armin H. Meyer, Assignment: Tokyo, An Ainbassador's Journal (New York: The Eobbs-Merrill Company, Inc., 19741, p. 11.3. 4'Yoshilto Kojo, Yoshilto, "Bretton Woods Taisei no Hen-yo to Nihon no Taio (The Transformation of the Bretton Woods System and the Japanese Reaction)," Atsushi I<usano and Tetsuya Umemoto(eds.), Gendai Nihon Gaiko no Bunseki (An Copyright 2003 by Taylor & Francis Books, Inc.

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Analyis of Modern Japanese Foreign Policj,) (Tolzyo: Tolzyo University Press, 1995), pp. 258-62. 4Westler, et.al., The Textile Wrangle, p. 8.3; Wakaizumi, Tasaku, pp. 455-59. 49Wakaizumi, Tasaku, chap. 17. jODestler, et.al., Managing an Alliance: The Politics of US-Japanese Relations (Washington, DC: Broolzings Institution, 19761, pp. 38-39. jlDestler, e t d , The Textile Wrangle, p. 69. j2The President's News Conference, February 6, 1969 and December 10, 1970, in Johnson, Press Conferences, p. 17. jjThe President's News Conference, December 10, 1970, in Ibid., p. 138. j4The President's News Conference, February 6, 1969, in Ibid., p. 17. jjInterview with Morton H . Halperin; March 20, 1996, Washington, DC. jGDestler, e t d , The Textile Wrangle, pp. 92-93. j7Memo from Secretary of Commerce Stalls to the President, "Mission to the Far East," May 19, 1969; White House Special Files, President's Office Files, Box 2 (President's Handwriting); National Archives, College Park, MD. jtMemo from Peter Flanigan to Maurice Stans and Harry Dent, August 22, 1969; White House Central Files, Subject Files, Box 4 3 ( C O 75); National Archives, College Park, MD. jyWakaizumi, Tasaku, chap. 11. "Ibid., pp. 356-57. The textile paper, made originally by Secretary of Commerce Stans, provided grounds of U.S. persistent demand of textiles after the 1969 Nixon-Sato meeting. See the next section. 61The Diaries of Eisalzu Sato, cited in Walzaizumi, Tasaku, p. 366. Translation and some clarifications by the authoc As of July, 1997, only the fourth volume of The Diaries of Eisaku Sato, which deals with 1970 and 1971, has been published. QSince the secret deal was negotiated only between Icissinger and Wakaizumi, State Department officials were completely ignorant of the agreement. Letter from Marshall Green to Go Ito, April 3, 1996. 63Walzaizumi, Tasaku, pp. 441-42. 6~Walzaizumi, Tasaku, pp. 439-40. M c Yoshida in the statement means ICei Wakaizumi. Instead of Wakaizumi, he used former Premier Yoshida's name in negotiating with Icissinger, who called himself Dr. Jones. Henry A. ICissingel; White House Years (Boston: Little Brown, 19791, pp. 325-36. 6j'Memorandum of Conversation, "Henry A. ICissinger's Presentation before the Governors of the 5 0 States in the East Auditorium of the State Department," December 3, 1969; White House Special Files, Staff Member and Office Files, A1 Haig, Box 4 5 (Haig Speech File); National Xrchi~es,College Park, MD. According to a recent Japanese hook written by a former journalist, the Under Secretary of State Alexis Johnson stated that the r e m o ~ a lof nuclear weapons became possible because of the reduction of the Chinese threat in East Asia. Since it was still far from confident regarding Chinese intentions of rapprochement, the Nixon administration made a secret agreement of reentry of the weapons with the Japanese government. See Tadae Takubo, Nikuson to Tai-Chugoku Gaiko (Richard Nixon and His Foreign Policy toward the PRC), (Tokyo: Chikuma Publisher, 1994), p. 67. 66Destler, et. al., The Textile Wrangle, p. 8. "As an assistant to ICissinger, Alexander Haig lznew of the secret Olzinawa-textile deal. He wrote in a memorandum that there was "the exchange [between Olzinawa and textiles] . . . going on since Sato's visit." Memorandum from A1 Haig to Copyright 2003 by Taylor & Francis Books, Inc.

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Bryce Harlow, "Textiles," March 12, 1970; White House Central Files, CO, Box 4 3 (Japan);National Archiyes, College Park, MD. 68Destlel; et. al., The Textile Wrangle, pp. 146-47. 691bid., pp. 149-55. Dissatisfied with the failure of the Japanese go~erninentto implement the Olzinawa-textile deal, ICissinger called Walzaizumi (who had decided to distance himself from negotiations with the U.S. government) on January 17, 1970, and asked how the textile problem was being addressed. See, Walzaizumi, Tasaku, pp. 606-07. 'ODestlel; et.al., The Textile Wrangle, pp. 151-53. 'IIbid., p. 158. '?Ibid., pp. 158-61. 'Telegram, Ambassador Meyer to Under Secretary Johnson, "Sato and Secretary ICenned!;" April 13, 1970; National Security Archive, Washington, DC. 'Wemorandum of Conversation, "Japanese Prime Minister Sato and U.S. Treasury Secretary I<ennedy, April 1.3, 1970; National Security Archive, Washington, DC. /~Destler,et. al., The Textile Wrangle, p. 181. '6In his memorandum to the President, Stalls argued that "economic and financial considerations have been subordinated to geopolitical and military factors . . . Neglect of these considerations in our o ~ e r a l policy-making l may account for unsatisfactory results in recent trade negotiations with Japanese officials." Memo from Stalls to the President, June 19, 1970; White House Central Files, CO, Box 43; National Archives, College Park, MD. "Destler, et. al., The Textile Wrangle, p. 204. 'Usahi Shimbun, June 26, 1970, cited in The Textile Wrangle, p. 206. Meanwhile, former Premier Nohusuke Kishi, a close friend of Nixon, sought to discuss the textile problem directly with the President. Playing an important role informally during the negotiating phase of the Okinawa reversion, ICishi suggested that the U.S. government focus on persuading individual Japanese industries rather than p~irsuinga governmental agreement. While realizing that "[the President's] meeting with ICishi could serve U.S. end, Flanigan and Nixon "shared [the view] that [the industry t o industry approach] would be time-consuming, and could result in a futile effort." Memo for the Flanigan Files, October 6, 1970, White House Special Files, Staff Member and Office Files, Peter Flanigan, Box 11 (Textile Meinorandurn); National Archives, College Park, MD. '"em0 from ICissinger to Nixon, "Your Meeting with Japanese Prime Minister Sato," October 23, 1970; White House Special Files, Staff Member and Office Files, Peter Flanigan, Box 11 (Textile Memorandum); National Archives, College Park, MD. Underlined in the original. "Wakaizumi, Tasaku, p. 608. Sato often wrote in his diaries that export restraints over textiles had been negotiated only with President Nixon through Walzaizumi. Eisalzu Sato, Sato Eisaku Nikki (The Diaries of Eisaku Sato), Volume 4 (Tokyo: Xsahi Shimbun, 1997), p. 219, 228. Moreover, Walzaizumi's name appears in some of Flanigan's documents. H e was seen as the most authentic mediator during the textile negotiations. For instance, Memo from John D. Ehrlichinan to ICissinger and Haig, September 21, 1970; White House Special Files, Staff Member and Office Files, Peter Flanigan, Box 11 (Textile Memorandum); National Xrchives, College Park, MD. glDestler, et.al, The Textile Wrangle, pp. 220-21. - ?

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"Ambassador Shimoda was replaced by Ushiba in June 1970, when the Miyazawa-Stans negotiation failed to resolye the textile impasse. 8jMe1no from Flanigan to the President, December 7, 1970; White House Special Files, Staff Member and Office Files, Peter Flanigan, Eox 11 (Textile Memorandum), National Archives, College Park, MD. "Memo from Harry Dent to Peter Flanigan, February 22, 1971, White House Special Files, Confidential Files, Box 63; National Archives, College Park, MD. "Memo from Stans to the President, "Textiles," February 22, 1971; White House Special Files, White House Central Files, Peter Flanigan, Eox 11; National Archives, College Park, MD. 86Memo for the President's Files, by Peter Flanigan, March 11, 1971; National Security Archive, Washington, DC.

"Ibid. "Destler, et.al., The Textile W~angle, pp. 268-89. 89NSSM 14, "U.S. China Policy," February 5, 1969; NSDM 17, "Relaxation of Economic Controls Against China," June 26, 1969; NSSM 107, "Study of Entire U N Membership Question: U.S. China Polic!;" November 19, 1970; NSSM 124, "Next Steps Toward the People's Republic of China," April 19, 1971. In NSSM 124, I
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CHAPTER FOUR

JAPAN'S ECONOMIC SUBMISSION TO THE UNITED STATES: A RESPONSE T O T H E "ALLIANCE DILEMMA"

JAPAN'S

MISPERCEPTION OF THE TWO"NIXONSHOCKS"

In San Clemente, California, President Nixon announced the opening to China at seven o'clock in the evening on July 15 (eleven o'clock the next morning in Japan): Premier Chou En-lai and Dr. Henry IGssinger . . . held talks in Peking from July 9 to 11, 1971. Knowing of President Nixon's expressed desire to visit the People's Republic of China, Premier Chou En-lai, on behalf of the People's Republic of China, has extended an invitation to President Nixon to visit China . . . The meeting between the leaders of China and the U.S. is to seek the normalization of relations between the two couns questions of concern t o the two sides.1 tries and also to exchange ~ i e w on

Premier Sato received the news three minutes before the announcement. Except for the Japanese Ambassador to the United States Nobuhiko Ushiba, who had a phone call on this announcement from Under Secretary of State Alexis Johnson about an hour before, there was nobody in the Japanese government previously informed of this U.S. radical shift.2 Some Diet members, upset at the sudden announcement, rushed to the Foreign Ministry, shouting at the officials there for not having anticipated the U.S. approach to the PRC.3 At press conferences on July 16, the Japanese government announced no specific criticisms against the Sino-U.S. accommodation. Although looking upset, Sato only stated that the Japanese government welcomed a relaxation of tensions between the United States and the PRC.4 A few days later when the special Diet session started, the Premier repeated a similar statement, saying that the easing of tensions between the two countries would promote peace in Indochina. With Nixon's announcement, he recognized a need to contact Chinese leaders with an eye to resuming Japan's diplomatic relations with the PRC, but hesitated to do so as long as the Japanese gov-

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ernment did not know the real U.S. intention behind the accommodation. Rather than approaching Chinese leaders, Sato sought to discuss with the Nixon administration the issue of the Chinese seat in the United Nations. That is, nothing was decided in the Japanese government but to verify U.S. intentions. Despite the calmness of the official statements, however, Nixon's announcement stirred up the feelings of Japanese leaders. The primary fear was abandonment. Although Under Secretary Johnson told Ushiba that the U.S. government did not intend to alter its policy toward Japan, Ushiba doubted the truth of his answetj He and major Foreign Ministry officials suspected that Nixon's real intention was to admit the PRC into the United Nations instead of Taiwan as the only legitimate Chinese representative. Given the fact that successive U.S. administrations had forced the Japanese not to establish a diplomatic relationship with the PRC, Japanese leaders emotionally opposed Washington's abrupt policy change, criticizing the United States for its heartless disregard for its moral obligations to its ally.6 Leaders in Japan put the credibility of the security treaty into question for the first time in postwar history.' Along with the fear of abandonment, the "shock" stemmed from Japanese leaders' particular feelings toward China as a market. In the 19507s, Secretary of State John F. Dulles had forced the Japanese government to have diplomatic relations with Taiwan instead of mainland China. Successive Japanese prime ministers, however, had more or less sought to cultivate economic ties with the PRC within the limits of U.S. permission. Given that fact, Nixon's failure to provide advance notice made the Japanese feel betrayed regarding Japan's foreign policy toward a neighboring country." It can be documented today that the U.S. government had no intention of abandoning Japan at that time. The Nixon administration utilized the U.S.-Japan Security Treaty to persuade the Chinese that Japan's military expansion could be restrained, after the reduction of U.S. troops. Nixon recalls in his memoirs that "if we were to leave Japan naked and defenseless, they would have to turn to others for help or build the capability to defend themselves."9 Since Chinese leaders worried that the reduction of the U.S. security umbrella by the Nixon Doctrine would invoke the emergence of aggressive Japan, both Nixon and Zhou found a common interest in continuing the U.S.-Japan Security Treaty. The perspective implied a drastic change in the Chinese traditional policy that had seen the U.S.-Japan relationship as an instrument of U.S. imperialism in East Asia.10 While Japanese leaders were suffering from the sudden announcement of U.S. policy toward China, the Nixon administration was considering another radical change in its economic policy. Concerned about large trade deficits and a high rate of unemployment and inflation, the Administration was planning to suspend the gold-dollar exchange, and to realign the exCopyright 2003 by Taylor & Francis Books, Inc.

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change rate. Since the unconditional conversion of the dollar into gold and the fixed exchange rate had been a hallmark of the U.S. prestige during the postwar period, successive U.S. presidents had been hesitant to end the established monetary system. By contrast, Nixon had no hesitation in renouncing the Bretton Woods regime." O n May 8, 1971, Lyle Widinan, an experienced member of the Research Department of the Treasury's International Affairs Division, wrote the following confidential memorandum describing the way to make a new U.S. economic policy: 1. A significant revaluation of the currencies of major European countries and Japan as a result of floating rates or other actions. 2. X fairer sharing of the balance of payments and budgetary costs of the military burden. 3. An improvement of the trade policies of the European countries and Japan. 4. A sharing of foreign aid, which takes into account U.S. defense burdens. 5. Monetary iinpro~einents,including greater flexibility and phasing out of gold and a ~ o i d a n c eof excessive use of controls.

The U.S. should be prepared to indicate, and if necessary, use the following measures as negotiating leverage: 1. suspension of gold convertibility; 2. imposition of trade restrictions; 3. diplomatic and financial intervention to frustrate foreign activities which interfere with the attainment of our [U.S.] objectives, and 4. reduction of the U.S. military presence in Europe and Japan11

As the textile conflict increasingly came to be viewed not just as an item of trade friction but also of the national security agenda, the monetary reform was considered as a vital U.S. interest within the Nixon administration. The memorandum indicated that the U.S. overcommitment to its allies' security and economic affairs during the postwar period had conversely damaged the U.S. economy. In the early 1970's, despite Nixon's intention of reducing global responsibilities, his agenda of an "honorable retreat" prevented the U.S. government from quickly withdrawing its troops in Vietnam. Frustrated with increasing trade deficits, some U.S. officials in charge of economic affairs insisted that the U.S. postwar military commitment had downplayed the importance of economic policy. They suggested that the White House focus on resolving trade problems and allaying the flow of the dollar by demanding that U.S. allies purchase more U.S. products.13 The U.S. new policy, however, had a contradiction. While seeking to realign the exchange rate with its allies, the U.S. government was not willing to reduce the value of the dollar against gold. Secretary of the Treasury John B. Connally once stated that "changes in our present international economic and financial position must be achieved without . . . underminCopyright 2003 by Taylor & Francis Books, Inc.

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ing confidence in the dollar . . . Should we fail, forces of economic nationalism and isolation in one country after the other . . . could become unmanageable."'4 It can be documented today that Nixon's New Economic Policy sought to resolve American economic problems by forcing U.S. allies to adjust their economic policies. The increase of the money supply during the Vietnam War naturally brought about inflation, and reduced the credibility of the dollar. The Nixon administration sought to redress the dollar crisis by having only foreign currencies increased in value and imposing import surcharges. The new plan was to compensate for the U.S. shortage of tax income by increasing the revenue from foreign countries.~ The most significant decision of suspending the gold-dollar conversion was made at the Camp David meeting during August 13-15. At the meeting, Nixon did not appear to have been worried that his action of closing the gold-dollar standard might have been interpreted abroad as an act of American economic nationalism threatening the existence of the liberal international economic order. His only concern lay in reducing the domestic unemployment rate. Secretary of the Treasury Connally was also preoccupied with U.S. national interests. He entered the Administration convinced that Western Europe and Japan were exploiting the United States, penetrating the American market with underpriced exports. With international responsibilities preceded by domestic interests, the Camp David meeting concluded that a closing of the "gold-window" would be the most desirable action for the U.S. economy.16 Nixon announced the New Economic Policy on August 15. Except for Premier Sato and a few ministers, none of Japanese officials were informed of the new policy beforehand, so it soon came to be called the "second Nixon Sl~ock."~' The announcement touched on the need of U.S. allies to share the economic burdens in the West, which the White House thought had been carried only the United States: Today, largely with our help, [the economies of Europe and Asia] have regained their ~itality.They have become our strong competitors, and we welcome their success. But now that other nations are economically strong, the time has come for them to hear their fair share of defending freedom around the world.18

Although pointing to allies generally, the statement was written against the overflow of Japanese goods underpriced with a fixed exchange rate. At the convention of a conservative veterans' organization, Nixon publicly complained about the Japanese, saying that "the U.S. now faces a more serious [economic situation] than the hard time we experienced at the time of 'Pearl Harbor' during the Pacific War."l9 As far as the decision-making process in the White House is concerned, the New Economic Policy had nothing to do with the opening to China. But, faced with an impasse in the textile negotiations, the President and his advisors had negative feelings toward Japan at the time of both announcements.

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The Impact of the Two "Nixon Shocks" Both announcements regarding U.S. security and economic policies gave a serious blow to the Japanese. They were "shocks," not only because the initiatives were to alter radically the premise of Japan's postwar foreign policies, but also because none of Japanese leaders, including Premier Sato, were given enough time to address the policy changes. For Japanese leaders, the sum effect of these announcements threw into question the dominant assumption of foreign policy held by successive conservative governments for the previous two decades. By maintaining a close alliance with the United States, the Japanese government believed that American actions on major issues would have accommodated Japan's basic interests. The Nixon "shocks," however, were brutal signals suggesting the very opposite.20 Premier Sato wrote in his diary on July 31, 1971, "It might be Nixon's personal preference, but I think he uses too many envoys and emissaries. " 2 1 Except for some officials with expertise on Japan, the President and other advisors did nothing to soften the blow. Nixon was in no mood to be helpful to Sato, nor were any other senior adviser involved in either of the two actions so inclined. There was a sense among them that the Japanese needed to be shocked into action, that radical U.S. actions would be able to move Japan toward policy changes, which more diplomatic approaches failed to accomplish for three years regarding textiles.22 In the U.S. government, there had been many fewer officials with expertise on Japan and East Asia, compared with their counterparts on Europe. According to Morton H. Halperin and Priscilla Clapp, few officials had been to Japan, had knowledge on Japan, and had been encouraged to think about Japan. They argued that, given the difference in numbers, American leaders' image of postwar Japan had stemmed from U.S. national interests, viewing it only as the major U.S. stabilizing force in East Asia, rather than from the informed deliberations that took Japanese into uniqueness into account.23 Despite the increasing perception of Japan reneging on the Okinawatextile agreement, however, the President and his advisors did not have any intention of shifting the U.S. security requirement from Japan to China. Nixon said to Foreign Minister Fukuda at the September meeting that "the necessity is clear for continued close relations between the governments of the United States and Japan, because . . . our friendship is essential to the peace of East Asia and the Pacific." State Assistant Secretary Marhsall Green at that time recalls that "there was never any thought of supplanting Japan with China as the principal instrument of containment in East Asia."24 Despite the repeated announcements, Japanese leaders were preoccupied with the possibility of abandonment. It appeared for the first time in postwar history as the fear that the U.S. provision of security to Japan was not quite a guaranteed matter, and that U.S. relations with Japan could

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change depending on the U.S. government's global strategy and tactics. Plagued by the domestic repercussions of the U.S. China policy, suffering from the textile dispute, and concerned about the final ratification of the Okinawa reversion in the U.S. Senate, the Sato cabinet had little comfort in Japan's relationship with its seemingly indispensable partner of the last two decades.25 At the beginning of 1972, Premier Sato expressed, in his policy speech to the Diet, his feeling about the two "Nixon Shocks" and the textile friction, which gave unprecedented blows to the Japanese in the previous year: The drastic change in world conditions in 1971 put Japan in a difficult international situation. Under these new conditions, it is reasonable to say that uneasiness and irritation h a x been per~asiveamong the Japanese people.26

Although using the term "Japanese people," the speech indicated Sato's own feelings. At a cabinet-level meeting on economic policy, Sato voiced his disapproval by stating that America was "rude" for such insensitiveness.2' Since his foreign policy objectives had been attained by adjusting Japan's national interests to those of the United States, the Nixon administration's seemingly unhelpful attitude shook the Premier's belief in the closest ally. A January 6 , 1972, New York Times article exemplified the overall feelings of Japanese leaders from an American perspective:

X foreign visitor repeatedly heard the refrain: "we feel isolated." To the north are the Russians, whom the Japanese dislike and distrust. To the west are the Chinese, whose leaders are showing ever more hostility toward Japan. Elsewhere, other Asians are wary of the Japanese, and the Japanese know it . . . Worst of all, in the Japanese view, the Americans, good friends for a quarter-centur!; seem t o he turning against them. The Japanese feel they were humiliated by President Nixon's abrupt change in China policy without consulting them, they were hurt by this new economic policy.'"

The radical U.S. shift provided Japanese citizens with a new image of the United States as bullying Japan. A survey on Japanese public opinion in early 1972 indicated that, while regarding the United States as the most reliable country, Japanese people began to view it as a new threat as well. The number of the Japanese who came to have anti-American feelings increased suddenly after 1971. Compared with the aged, Japanese between 1 5 and 24 year old replied that, while still being the closest ally, the U.S. would be a new threat to Japan, probably more critical than China and the Soviet Unioi1.~9 Even in the United States, there were some criticisms of Nixon's abrupt announcements, warning that such policies as issue linkage and secret diplomacy would only worsen the bilateral relationship. For instance, Under Secretary of State Johnson recalled in his memoir that "after this 'Nixon shokku' . . . there has never again been the same trust and confiCopyright 2003 by Taylor & Francis Books, Inc.

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dence between our two governments."30 A White House official, in his memo to Peter G. Peterson, implicitly criticized the back-channel issue linkage by saying that "making coilcessioils in one area in exchange for unrelated actions in another often fails to meet the domestic political problem faced by the other government in meeting our requests and is apt to establish precedents which may haunt us in the future."3' As far as the U.S. decision-making was concerned, the two "shocks" and other textile and trade issues, which haunted Japanese leaders in late 1971, had been totally different agendas. These policies only reflected American unconcern with Japan and their willingness to disregard its interests, rather than a calculated sequence of acts intended to prod the Japanese into a more submissive position. "The 'shocks' had their roots in concerns and priorities outside of the U.S.-Japan relationship, and no serious effort was made by U.S. leaders to calculate the impact of any one of them upon Japanese domestic policy and foreign policy, let alone their cumulative effect. "32 The following statement by former Premier Nobusuke Kishi, who visited Washington in October to verify the Nixon administration's real purposes of the brutal actions, exemplified the Japanese concern: Personally, although [Kishi] did not feel that the relations between Japan and the United Sates are fundamentally bad, frankly speaking he noted concern about the undesirable aspects of the pre~ailingmood between both countries. He was pleased that the textile settlement would permit both countries to take up the other economic issues now, including the monetary problem, but in light of our experience in dealing with the textile issue he urged strongly that each nation cooperate fully with the other to resolve the other outstailding economic issues as smoothly as possihle.3"

Regardless of whether the U.S. government had a sequence of policy changes, the "Nixon Shocks" made the Japanese feel somewhat of a crisis in the U.S.-Japan relationship. They had both fear and irritation from Nixon's attitude seemingly unconcerned about Japan. Given the situation, Japanese leaders indicated their willingness to meet with the Soviet Foreign Minister Gromyko.

The Soviets' Approach to Japan Along with the Japanese, the first "Nixon Shock" had a powerful impact on Soviet leaders. In the face of their ideologically-rooted dispute with the Chinese in the 1960's, the Soviets emphasized that the real Chinese intention of the Sino-Soviet dispute was to provoke conflict between the Soviet Union and the United States. When Nixon announced an opening to China, the first Soviet reaction was predominantly concern. They, however, sought not to present their negative attitude, seeking to utilize the SinoAmerican rapprochement for their own national interest. For instance, Georgi A. Arbatov, a senior expert on American affairs at the Institute of Copyright 2003 by Taylor & Francis Books, Inc.

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the USA, argued that the United States could have various interests in normalizing relations with China, but did not see that Nixon's visit would lead easily to the resumption of their diplomatic relations. He noted that "the changes in American-Chinese relations will be not in words, not in the diplomatic maneuvers of these countries, but in their deeds.":l Soviet leaders argued that while the incipient accommodation of American-Chinese relations would be an accomplished fact and could not be nullified, further normalization would not be inevitable and could be avoided by their policy.35 In their mind, it was to be a good opportunity to cultivate ties with a new erstwhile ally after relentless confrontations for many years.36 Based on those considerations, the Soviets made different overtures to Japan during 1972-73, compared to their high-handed approach in the past. In order to see if the Soviets could gain influence on the "shocked" Japanese, Foreign Minister Andrei A. Gromyko visited Japan in January, 1972.:' He proposed a Soviet concession regarding the northern territories, which the Soviets called southern Kuril Islands that were incorporated into the Soviet Union after World War 11. When Soviet-Japanese relations were normalized in 1956, the Soviets suggested that two out of four islands be returned. In 1960, however, the Soviets opposed Japan's extension of the security relationship with the United States, announcing that there had been no territorial dispute with the Japanese. Since then, the Soviets had been reluctant to discuss the issue with the Japanese government. Gromyko met with Premier Sato on January 28, 1972. With an eye to exploiting Japan's new mistrust of the United States, he suggested that two out of the four islands be returned, in accordance with the negotiations both governments had done in the 1950's. The following exchange expresses both sides' positions: Gromylto: It is impossible for the Soviets to have the peace treaty with the Japanese under the condition being suggested by the Japanese goyern1nent.jVhe only thing we can d o is to go hack to what we agreed in 1956 [i.e., the Soviets are ready to return only two out of four islands], and then to hold negotiations for the peace treaty. Sato: Since there are many differences in views on foreign policies between the Soviets and the Japanese, I should not say anything at this moment. t is now ready Gromyko: I would like t o repeat that the S o ~ i e government to negotiate with the Japanese goYernment on the basis of what we agreed in the 1956 Soviet-Japanese joint coinmuniquC. Sato: We first resolved the issue of the Ogasawara islands. Then, it is decided that Oltinawa will be returned. The next agenda will be about the northern territories.39

Gromyko's suggestion, however, did not make much impact on Japanese foreign policy. Sato already discussed the U.S. objectives of creating an opening to China with Nixon at the Sail Clemente summit before meeting with Gromyko, and was reassured that U.S. relations with the PRC would not be a substitute for those with Japan. The Japanese government had no Copyright 2003 by Taylor & Francis Books, Inc.

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intention of cultivating ties with the Soviets by sacrificing the established relationship with the United States. Moreover, Sato was concerned about the deterioration of the relationship between Japan and China, in case the negotiations between the Soviets and the Japanese were successful. In terms of the ideological dispute with the Soviets, the Chinese condemned the diplomatic contacts between the Soviet Union and Japan. Peking New China News Agency (NCNA) reported that "it was an important step taken by Soviet revisionist social-imperialism to step up its collusion with the Japanese reactionaries to oppose the people of China and other Asian countries and to counter with U.S. imperialism for spheres of influence."l0 Given the Sino-Soviet split, Sato regarded the resumption of diplomatic ties with China as more vital. However, Sato was also considering the long-term plan in which the Japanese government could have the northern territories returned by the Soviet Union. Already in 1970, he proposed to Soviet leaders, through Hakuei Ishida, a Diet member from the LDP, who had many connections with Soviet leaders, that the Japanese government would be ready to "purchase" the islands. While the majority of LDP members of the Diet only claimed Japan's sovereignty on the four islands, Sato suggested secretly that the Japanese government be willing to pay the same amount as the Soviets had invested for the economic development of the islands.4' Although we have yet to learn the I
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dutiable items imported into the United States. Nixon stated the following about the impact on U.S. allies of the new economic program: To o ~ i friends r abroad. . . I give the assurance: the United State has always been, and will continue to he a forward-looking and trust-worth trading partner . . . In full cooperation with . . . those who trade with us, we will press for the necessary reforms to set up an urgently needed new international monetary system. Stability and equal treatment is in everybody's best interest.43

With that said, the announcement spread through Tokyo as soon as Nixon's speech ended. By noon, Japan's business community was in the inidst of a panic. While American and European foreign exchange markets were closed at the time of the announcement, the Japanese remained open, addressing the sudden rush to sell the dollar, which had to be absorbed by government intervention purchases. Premier Sato's Executive Secretary Minoru ICusuda noted in his diary that "[The U.S. announcement] never paid any attention to its friends. It seems to have given up its role as a superpower."44 The Ministry of Finance (MOF) could have closed the market on that day, but the officials hesitated to do so, because they wanted to know the purpose of the U.S. government in the announcement. They continued to purchase a tremendous amount of dollars, in order to maintain the fixed exchange rate. Eight hours after Nixon's announcement, the M O F convened a meeting, in which the following four options were considered: (1) Immediate revaluation of the yen vis-a-vis the dollar to a new fixed rate ( 2 ) Suspension of the commitment to maintain the parity of the yen within the 0.75 percent plus-or-ininus hand around the 1 dollar = 360 yen (3) X "controlled float" under which the [yen] would be allowed to increase gradually (4) Continued maintenance of the fixed exchange rate (1 dollar = 360 yen)qj

While considering the closing of the foreign exchange market, M O F officials finally decided to choose the fourth option, and to wait to see how the rest of the world would respond to the announcement. They chose to maintain the fixed exchange rate with continued governmental support. As Japan's response to the U.S. opening to China indicated, the decision (or non-decision) exemplified Japan's characteristics as a "reactive" state, which tends to do nothing until other countries do something.46 Yusuke Kashiwagi, the former Vice Minister of the Finance Ministry, flew to Europe and the U.S., in order to collect information. He went to France first, because he and other M O F officials expected to collaborate with European countries in requesting the U.S. government to reconsider the suspension of the gold-dollar exchange and import surcharge.4' The policy maintaining the fixed rate received little support from the business community. For business leaders, appreciation of the yen reduces Copyright 2003 by Taylor & Francis Books, Inc.

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the price competitiveness of Japanese goods abroad, while at the same time Japanese manufactures can purchase importing goods inexpensively. The import surcharge, however, only reduces the price competitiveness of Japanese goods in the U.S. market, because the rate of the surcharge depends exclusively on the U.S. decision. The Japan Chamber of Commerce stated that if it was told to choose between the two options, the revaluation of the yen would be more preferable than the imposition of surcharge.48 Given the fact that the U.S. had been the largest market for the Japanese in postwar history, and that the exports to the U.S. consisted of 30 percent of the total Japanese global exports in 1970, which exceeded exports to Southeast Asia, leaders of trading companies wondered if the import surcharge would make them less competitive in the most important market.49 O n the contrary, M O F officials felt a sense of moral obligation to the banks, since the M O F and the Bank of Japan had required foreign exchange banks to hold a certain amount of dollars with the promise that the government would never agree to a change in the parity of the yen to the dollar. The banks had cooperated with the government for many years. Given the situation, the M O F argued that it was unfair for the banks to suffer from serious losses stemming from their obedience of holding the foreign currency. '0 Twelve days after Nixon's announcement, afraid of the frantic trading of selling the dollar and of the government's capacity to maintain the fixed rate, the M O F agreed with the Bank of Japan that the exchange market should be temporarily closed. Finance Minister Mizuta stated at an August 2 7 press conference that "the international monetary system has recently become extremely fluid, and transactions for a majority of the currencies of the major European countries are occurring at rates that exceed the allowable level of fluctuation stipulated by the IMF [International Monetary Fund] Agreement."j' Finance Minister and other M O F officials realized that it finally became impossible only for Japan to have the exchange market open. Unaccustomed to such a radical policy change, the Japanese government had to absorb a large amount of dollars, until it verified other countries' responses to the New Economic Policy. Even after the float decision, Japanese leaders wanted to know specifically what the Nixon administration expected the Japanese government to do. What mix of trade and investment liberalization, foreign aid increase, expanded defense budget, and the yen appreciation was required for Washington to return to a new fixed rate and to remove the import surcharge? Japanese leaders first assumed that the vague American demands at the early stage were only an inflated preliminary negotiation position. They thought that the White House needed only a certain period to reconsider its economic policy, and that it would go back to the previous economic

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regime in which the U.S. played a central role. They were, however, to be surprised by the lack of flexibility in the U.S. position, as time went by. In response to Japan's announcement of the float, the U.S. government welcomed the move toward a realistic rate adjustment. The U.S. government, however, said nothing about its willingness to reconsider the suspension of the surcharge or any other alternative. Secretary of the Treasury Connally and other officials argued that the U.S. policy change resulted from past American generosity in dealing with Japan and Europe toward economic development, and that it was time for them to help redress the U.S. balance of payments. The U.S. side, however, was quite vague about specific demands to its allies. It simply stated that the gold-dollar convertibility would remain suspended, and that the surcharge would be maintained.j2 Connally was intentionally vague about how long the surcharge would be maintained and what kind of specific measure would be required for the Japanese government to achieve its removal. He and administration officials were betting that the other trading nations felt sufficiently dependent on an orderly world trading system, created by U.S. hegemony, to make significant concessions. President Nixon only told the American press the following week that the surcharge would remain in effect for some time, since the U.S. government was trying to achieve a long-term rather than a temporary solution to international economic pr0blems.~3 The early response of Japan's business leaders to the float was moderately supportive. Although not pleased to see that the move would reduce the competitiveness of Japanese products in foreign markets, major business associations and the Chamber of Commerce stated their "understanding." The M O F and the Bank of Japan tightened exchange controls under the "controlled float" so that they could dampen the appreciation of the yen without buying an enormous amount of U.S. dollars through intervention. The governmental control, however, received little support from the business community. Frustrated with the reluctance of the government's compensation programs along with the fear of the U.S. import surcharge, business associations argued that it would be better to have a unilateral revaluation of the yen to a new fixed parity than continuing to maintain the heavily controlled float in which the government regulated their free exchange of foreign currencies. One week after the float decision, Japan's international monetary policymakers left for Washington for a series of international minister-level meetings. Secretary of State Rogers' opening speech included the U.S. demands of Japan's yen revaluation. To Finance Minister Mizuta, who was eager to persuade U.S. leaders of Japan's economic vulnerability, Connally emphasized the importance of three issues to be resolved by Japan's initiatives: (1)a large change in the parity of the yen, (2) the textile dispute, and ( 3 ) a reduction in Japan's tariff and non-tariff barriers? Mizuta replied that Japan was ready to assist the United States, if necessary, out of gratitude for American help of rebuilding Japan's economy in Copyright 2003 by Taylor & Francis Books, Inc.

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the past, but he also insisted that Japan was not now in a situation of "basic imbalance" that required a large parity change. He recognized that the 1971 balance of payments indicated a large surplus, but added his "guess" that the imbalance would soon be corrected by the government's domestic economic stimulation measures.55 Connally pointed out that, in an ideal world, (1)military expenditure, (2) trade, and ( 3 ) the exchange rate were the three main issues of burden-sharing between the U.S. and Japan, but that Japan's contribution to issues over trade and the exchange rate would be realistic in the short run. He argued that, given the situation, it would be time for Japan to reconsider appreciating the value of the yen.56 The Washington meeting ended with little more than an announcement of the need for a maturity of U.S.-Japan relations. The failure of the bilateral meeting made M O F officials expect that European countries would cooperate with Japan in demanding that the Nixon administration eliminate import surcharges. At the G-10 meeting, September 15-16, however, despite the strong appeal of finance ministers in Europe and Japan, Connally repeated that the American negative balance of payments could be rectified only by up-valuing or floating currencies other than the dollar. He also insisted on the need of other governments for trade and investment liberalization and greater military burden sharing. For the Nixon administration, the entire series of economic reforms was an important factor in helping Nixon prepare for a reelection battle which was complicated by the continuing problems of inflation, high unemployment, and an unpopular war in Vietnam. The White House now began to regard economic issues as more vital than before. Even Kissinger, who was not involved in making the New Economic Policy, commented about the ongoing monetary realignment: N o w the issues have changed and the international economic scene . . . is having a profound impact on political life. It is clear now, for instance, that a foreign exchange issue requires foreign policy knowledge to be haildled correctly . . . N o w the National Security Council is being pulled back into foreign economic policy.-."

The President also said at a September news conference that "what we are seeking is a permanent solution and that is why the length of the temporary surcharge will be somewhat longer, because we need to address ourselves not only to the monetary policy and exchange rates, we have to address ourselves to burden-sharing . . . [and] trade restraints, including nontariff barriers."jg This position, however, was seen by other governments as no more than an enforced settlement that should be judged as no less than a total American victory. From the end of September through October, two important meetings were held. First, the G-10 finance ministers gathered again on September 2 5 for the annual IMF and World Bank meetings. During the month and a Copyright 2003 by Taylor & Francis Books, Inc.

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half after the announcement of the New Economic Policy, the G-10 ministers decided on no more than the agenda of this meeting: (1)the amount and method of parity adjustment, (2) whether or not the final settlement would include margins of allowable rate fluctuation, ( 3 ) specific requirement for the removal of the import surcharge, and (4) whether or not issues of trade and investment liberalization, and of defense spending, would be included in the overall discussioi1.~9Given the situation, there was no substantial discussion, and the 1971 annual meeting of the IMF ended with little more than an endorsement of returning to fixed exchange rates and of promoting a more open international trading system. After the meeting, Finance Minister Mizuta met with Connally, and argued that the Japanese government was reluctant to discuss the defense spending, because the agreement of the U.S. reversion of Okinawa would be discussed for ratification in the Diet. Second, two technical meetings about monetary policy, the OECD Working Party and the G-10 Representatives' meeting, were held respectively in Washington and Paris in mid-October. At both meetings, despite the Europeans' intense criticism against a unilateral European devaluation as an unreasonable U.S. demand, Secretary Connally and Under Secretary Paul Volcker remained firmly opposed to the U.S. dollar devaluation. Volcker met with the Japanese representatives, and requested that the Japanese up-value the exchange rate by 20-25 percent. He also touched on defense spending, saying that the U.S. government was satisfied with Japan's recent increase in the defense budget in terms of military burdensharing.60 Before the meetings, the Japanese representatives, in collaboration with European counterparts, planned to accuse the U.S. of harboring a selfish attitude. As time went by, however, they found that mutual frustration with Connally's stubbornness was not an adequate basis upon which Japanese and European could cooperate to form an "alliance." Japan's greater military and economic dependence on the United States made the possibilities of Japanese collaboration with Europe extremely limited.6' Being isolated, Japanese leaders were under pressure. They believed that their economy was vulnerable and depended heavily on the established international system which had been under U.S. leadership. Sharp conflict with their most significant ally, the United States, combined with the seriousness of the textile dispute, greatly heightened the feelings of insecurity among the Japanese. By early November, all participants, even the Americans, were tired of the impasse in the negotiations. With the frustrating closure of the Paris meeting, Connally thought that the time had come to visit Japan for a more detailed series of bilateral negotiations. Since Connally had been known as a stubborn negotiator, M O F officials prepared tentative questions and answers to be discussed during his visit. His first remarks after his arrival in Japan, however, were more about reminiscences of the overall U.S. policy toward China than about specific monetary problems. At the meeting with Sato, Connally said that Copyright 2003 by Taylor & Francis Books, Inc.

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whether the Japanese government would ultimately collaborate with the United States or European countries was up to the Japanese themselves decision. The Premier indicated a far more flexible attitude toward the upvaluation of the yen. At this time, Connally's negotiating counterparts in the M O F and the LDP also became more inclined to compromise with American demands than they had been before. Although he did not change the U.S. position over the import surcharge and dollar revaluation, his soft and sincere negotiating style received wide support from his Japanese coui~terparts.~~ After Connally's Visit and the New Exchange Rate After Connally visited Japan, M O F officials and international financiers were confronted with the situation in which they would choose to cooperate either with Europe or the United States. They realized that, given Japan's dependence on the U.S. provision of security and economic guarantees, the Japanese government could do little but accept the revaluation of the yen. They began to explain to the public that the negative impact of the revaluation would not be as severe as previously thought, and that the yen appreciation would bring a reduction in the cost of Japan's imports. The idea was increasingly accepted by the public, and discussions in the Diet in late 1971 regarding the costs and benefits of the realignment attracted wide attention.63 As far as the business community was concerned, no responsible leaders were pleased with the prospects for the yen appreciation during the fall. But, around late November, the business organizations in which export-dependent manufactures were influential, such as Keidanren and the Japan Chamber of Commerce, began to urge the government to seek an early realignment of the exchange rate. The Nixon administration utilized bilateral negotiations in order to bring about the multilateral realignment more smoothly. In parallel with the monetary meetings, the Administration put pressure on European countries, Canada, and Japan, respectively, over trade issues. After four months' stubbornness, Connally and Volcker surprised other states' Finance Ministers at Rome G-10 meeting from late November, by saying that the U.S. government was ready to eliminate the import surcharges in return for other states' decisions on trade concessions, progress in sharing defense spending, and an 11 percent average dollar depreciation. They also proposed that the U.S. could devalue the dollar by ten percent against gold.G4 Stunned by the Americans' unexpected statement, the other ministers became quiet, and, after a silence, said that they would not accept either a failure of the U.S. to devalue the dollar, nor a devaluation of the dollar that was too excessive. Tony Barber, the British Chancellor of the Exchequer, said that "we could never agree to your devaluing the dollar that much." Connally responded, saying that "we thought you wanted us to devalue the dollar . . . H o w much [do you want us to devalue?]" Barber said,

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"5%." Connally said, "That will do no good . . . If you are only willing to agree to 576, then there is no way we will ever reach an agreement."6j He recalled later that "there was no reason for us whether other countries revalued or we devalued-the net effect was the same . . . But, G 10 wanted the U.S. to devalue. They want us to take the affirmative action of humiliation, to devalue our currency."66 The new U.S. initiative, however, helped unblock the negotiations. Leaders in the Japanese government, who had been asked to up-value the yen by more than 20 percent at the Rome meeting tried to utilize the upcoming Honolulu U.S.-Japan trade liberalization talks, to be held before the Smithsonian Conference, in order to allay the U.S. demand of raising the value of the yen. The meeting pledged that the Japanese government would implement the eight-point liberalization program, which had originally been labeled by the M O F as the "eight-point program to avoid yen revaluation. "6' A week later, the G-10 meeting was held again in Washington for the final settlement. Each finance minister concurred that the Japanese government should revalue the yen more than the rest of the countries. Finance Minister Mizuta repeatedly argued that it was difficult for the Japanese government to agree to more than a 14 percent up-valuation. Along with the confidential multilateral meetings where Connally demanded 20 percent revaluation, and the other participants supported the idea, bilateral U.S.-Japan talks were held. In the negotiations, while Connally and Volcker requested at least a 17 percent realignment of the yen, former Vice Minister Kashiwagi argued that "only the Japanese government made every effort to trust the value of the dollar in postwar history, and sought not to convert excessive amount of dollars into gold. The Japanese government can concede up to the 16 percent revaluation (1 dollar = 310 yen), but any greater increase will stir up the Japanese economy."6" The final settlement regarding the dollar-yen exchange rate was agreed to by Secretary of the Treasury Connally and Finance Minister Mizuta. Mizuta warned Connally that "the 17 percent up-valuation was a critical number for the Japanese. Before the Second World War, the Japanese government revalued the yen by 17 percent. Economic recession prevailed, and the Finance Minister who decided the up-valuation was assassinated."69 The two representatives finally agreed to the 16.88 percent realignment of the yen, which made the exchange rate 1 dollar = 308 yen. The Smithsonian Conference concluded with Japan accepting this new exchange rate. After the Conference, the Nixon administration announced the removal of import surcharges on December 20. During the negotiating process, it was the U.S. government's view that "Japan's foreign policy must be expressed primarily in economic terms because Japan does not have a military presence significant enough to influence international security policy.""J Along with the negotiations over the Copyright 2003 by Taylor & Francis Books, Inc.

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macroeconomic exchange rate, more specific restraints on textile exports were also discussed and a settlement reached. The next section documents the way in which the long-discussed issue was settled between the two governments.

After Nixon rejected the Japanese textile industry's plan of voluntary export restraints in March, 1971, both governments were at a loss regarding how to continue the negotiations. The impasse of the negotiations made a White House official write the following memo entitled, "Projecting the Future Development of the United States": The growing realization that we will be living in a far more competitive world-competing with several countries who d e ~ o t ea great deal of energy to shaping their future and who are growing increasingly sophisticated and efficient in the manufacturing sector . . . We see the Japanese make choices on a kind of consensus basis that involves several sectors of the society in such a way they become truly national efforts and not partisan ones7'

Premier Sato thought that the U.S. dissatisfaction stemmed from the misunderstanding of the term aensho s u m (I'll do my best). In the Japanese political and bureaucratic tradition, the term, if used by government officials, does not mean the policymakers' willingness and decision to resolve the issue at any cost but only their nominal intention of doing so. Whether an issue is really resolved does not matter for them.'2 Major Diet members and administrative officials in the Japanese government had supported the industry's approach, and had expected that the conflict could be resolved by its action. Given the situation, the Japanese government was reluctant to reopen talks, after Nixon rejected the plan. Since the industry could carry out the export restraint without U.S. approval, the Japanese government had only to wait for the plan to be implemented. The more serious concern of Japanese leaders was whether Nixon's dissatisfaction would make any impact on the U.S. reversion of Okinawa. Although the two issues were totally separate, Secretary of State Rogers recognized that when Nixon rejected the Japanese industry's voluntary restraints, there might be some impact on the Senate legislation over ratifying the Okinawa reversion.'3 Nixon began to condemn the Sato cabinet more strongly, and stated publicly that it would not be necessary for the U.S. government to seek a compromise with the Japanese. In the White House, some officials suggested that "[some legislative] action . . . be taken in the next couple of months that will please [the] people [of the textile industry]." It implies that the White House began to consider quota legislation as a part of its national security agenda.'4

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The Nixon administration conducted some important personnel change, with an eye to finding a way to work out negotiations. First, Nixon established the Committee on International Economic Affairs in the White House, and appointed Peter G. Peterson as Executive Director. Peterson also became Assistant to the President for International Economic Policy in January, 1971, who was to be responsible for the textile dispute.'j Peterson sought to exploit what was labeled the "carrot and stick" strategy: a search for sources of U.S. leverage to win textile agreements. For instance, the extent of U.S. troop levels was raised in negotiations with Korea, Taiwan, and Hong 1<0ng.'6 Second, former Secretary of the Treasury David M. Kennedy, who had been replaced by the Texas Governor Connally in December, 1970, was appointed as Ambassador-at-Large to discuss the textile issue with the Japanese government. After Nixon rejected the industry's export restraint plan, there was a general sense in the Nixon administration that Peter Flanigan should give way to somebody else. Kennedy first organized a very closed negotiating operation. He relied only on his personal staff aides, so even Kennedy's nominal superior, Secretary of State William Rogers, was not regularly informed on the details of the Ambassador's efforts. Kennedy visited Japan three times for the textile negotiations: two before the "Nixon Shocks," and the third after the event. In the negotiations, he sought to establish personal relationships with an extremely limited number of Japanese ministers, and urged them to try to understand the issues at stake generally before moving to concrete questions. In his first visit in April, 1971, he emphasized how serious the President was about textiles, and how important it was to remove this major irritation to U.S.Japan relations. He also demonstrated his own seriousness toward the resolution of the dispute over and over again, expecting that such a way of persuasion would work out for its settlement. One month later, he visited Tokyo again and met with Sato and other key ministers. Altl~ougl~ there was no specific settlement reached, both governments continued to explain the situation of the textile industry, and to view the dispute over textiles as a serious matter." The Japanese textile industry was now concerned about whether or not to carry out voluntary export restraints as it had planned. They still had bitter memories of the 1956-61 period, when Japan alone conducted export restraints on textiles and consequently suffered severe losses in its share of the U.S. market. The Japan Textile Federation, however, decided to implement its export restraint plan because the government outlined the compensation program. The Sato cabinet made the industry's plan a quasigovernmental operation by taking note of the plan and supervising and guiding its implementation. The efforts, however, had no impact on Washington's attitude. The Nixon administration still sought to restart the intergovernmental talks suspended since the failure of the Ushiba-Flanigan

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negotiation. A move toward the settlement was reopened after the "Nixon Shocks."'8 After the "Nixon Shocks"

The two "Nixon Shocks" provided a significant breakthrough in the textile dispute. As far as the impact on Japan was concerned, the second "shock" was more important for the textile dispute, while the first only made the Japanese aware that the U.S. government was changing the premise of postwar security policy toward East Asia. Regarding the U.S. decision-making process, however, the Nixon administration somewhat intentionally failed to notify Japan of ICissinger's visit to Beijing, for Japan's unhelpful attitude toward the textile negotiations frustrated the President. O n July 16, Nixon wrote his personal memo to Sato, saying that, "I have just completed a very fruitful round of discussions . . . regarding the current textile negotiations in the Far East . . . I must reluctantly express my regret upon learning that progress toward reaching accord with Japan had been delayed."" Implicitly, the failure of the textile negotiations was linked to the President's reluctance to address Japan as the major U.S. ally in the East Asian security zone. David Kennedy conducted his third visit to Japan from July 20 through early August, and discussed a need of early resolution with Premier Sato and MITI Minister ICakuei Tanaka. While Sato was more amicable toward an agreement, Tanaka argued that the Japanese government first had to see how the export restraints proposed by the Japan Textile Federation would work out. Before the trip, Kennedy repeated that his efforts would need a little more patience toward a resolution, but the major political advisors at the White House were concerned with the 1972 presidential campaign. They proposed that legal authority for presidentially-imposed import quotas be established, and that the United States set a deadline for reaching an agreement, after which the it could take unilateral action30 Japanese leaders met with Kennedy in the midst of a panic stemming from Nixon's announcement of the opening to China. Right after the first "shock," Japanese leaders were too confused regarding the American China policy to consider other economic issues. Until he was stunned by the second "Nixon Shock" in August, Premier Sato and his cabinet members could do nothing about textiles. Sato repeated a need to resolve the dispute, although expecting that the industry's plan of export restraints could satisfy Nixon's interests. MITI officials thought that the textile issue was totally unrelated to Japan's relations with the PRC, and the Foreign Ministry was preoccupied with finding out the U.S. intention regarding Sino-American rapprochement. In August, the announcement of the New Economic Policy drew Japanese leaders into greater confusion. They saw the absence of advance notifications as a calculated sequence of U.S. acts intended to prod the Japanese

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into a more submissive direction. The United States was viewed as a more internally-united actor than it was by Japanese leaders who overestimated the degree of coherence in the radical U.S. changes. For the Nixon administration, the absence of notification stemmed, if anything, from domestic reasons wherein the White House sought to prevent the interruption of the State Department. For many Japanese, however, the Americans' unhelpful treatment of the closest ally in East Asia threw into question the dependability of the allied relationship with the United States. It shook the longheld Japanese assumption that Washington would consider and protect Japan's interests within its global policy.8' The "shocks" brought two responses. The press and other mass media praised the impasse over the textile negotiations, calling it "Japan's first act of autonomy from the U.S. in postwar history." A survey on public opinion at the time shows that the United States was thought of as much as a threat to the Japanese as a reliable ally." However, the majority of government officials and business leaders began to claim that since indispensable relations with the United States were being shaken, Japan needed to concede on trade issues in order to restore the partnership. They modified the governmental compensation program for the textile industry, and argued that a governmental agreement would be desirable to protect long-term Japanese economic interests.83 In announcing the New Economic Policy, the Nixon administration warned the Japanese that the U.S. government would use the "Trading with the Enemy Act" for the unilateral implementation of import restraints. The Act itself was originally passed against Germany in 1917, but its most relevant section, saying that "during the time of war or during any other period of national emergency declared by the President, the President may . . . regulate . . . any . . . importation or exportation o f . . . any property in which any foreign country . . . has any interest," was included in the First War Powers Act signed into effect by Roosevelt in 1941. Since the Act had never been rescinded, a "state of national emergency" technically existed throughout the textile dispute. Peter G. Peterson played an important role in justifying the use of the term "national emergency," though the "emergency" in textiles obviously had nothing to do with issues that existed before the Second World War. Leaders in the Japanese textile industry called the imposition of surcharges "totally barbarian," and talked about the possibility of terminating the "voluntary program." Those in the government, however, were increasingly worried about the entire relationship with the United States, pressing for further Japanese concessions toward resolving the textile conflict. Foreign Minister Fukuda, seeking his career as Sato's "heir," told the press that the voluntary restraints had not helped the Nixon administration, and urged the industry to accept the reopening of governmental negotiations. When the eighth cabinet-level ministerial meeting was held in Washington in September, Fukuda discussed the naming of the next MITI Copyright 2003 by Taylor & Francis Books, Inc.

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Minister after the cabinet reshuffle. He said that the Sato cabinet "decided in favor of naming the present MITI Minister, Tanaka." Fukuda was told by the President that "[my] own political position was most difficult, and that it has become almost impossible to restrain the explosive forces . . . in the United States . . . October 15 is the latest date..that he could wait for a governmental agreement on textile~."8~ Tanaka had the same views as Fukuda regarding a need to resolve the textile dispute, but he took a sharply different attitude to the public. At press conferences, he claimed that it was impossible for the governments to make an agreement with the U.S., as long as the voluntary restraints were at work. O n his way to Washington, however, Tanaka held a secret talk with David Kennedy in Williamsburg, Virginia. Both agreed on the scenario that Japan would secretly prepare inter-governmental negotiations, while the U.S. would deliver an "ultimatum" threatening unilateral action if the negotiations failed, by October 15." Tanaka was publicly defiant while maneuvering toward a settlement on terms Japan had been resisting for three years. He thought that the Japanese should concede on textiles because the textile industry in Japan would soon be less competitive than its counterparts in Korea, Taiwan, and the Philippines, and that the American demand would be used as an incentive to alter the industrial structure.86 The Nixon administration sent Anthony Jurich, Special Advisor to Ambassador Kennedy, to Tokyo for the final stage of the negotiations in September. Jurich arrived in Tokyo with no authority to make compromises with the Japanese government. His assigned job was only to win a quick agreement with the Japanese concessions to carry out comprehensive export restraints that would include all textile products. Tanaka, although first considering an agreement with provisions reconciling Kennedy's demand with the Japanese industry's plan, found it impossible to reach better terms than those Jurich proposed. Premier Sato and MITI Minister Tanaka decided that the Japanese government would purchase the surplus textile products resulting from the prospective agreement. Tanaka explained the government's relief program, amounting to more than 2,000 billion yen, which included the governmental purchases, long-term low-interest loans for stockpiling, and production adjustment. Jurich and Tanaka signed the "Memorandum of Understanding," the contents of which were the same as Nixon had been ~ e e k i n g . 8 ~ In response to the Jurich-Tanaka memorandum, the White House announced that "[this is] a hopeful sign of the continuation of our good relations with Japan," while the textile industry, MITI officials, and Diet members in Japan condemned the Sato cabinet' for its "forced" concessions to the United States. When the bilateral negotiations were concluded, Wakaizumi, who worked as Sato's envoy until the agreement, called ICissinger from Tokyo. Alexander Haig, who answered the phone instead of Kissinger, said that "ICissinger was right now preparing his second visit Copyright 2003 by Taylor & Francis Books, Inc.

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to China, so he can't answer the phone now. But, we should have proceeded one step further by making this agreement." Wakaizuini recalls that he wanted to complain about his frustration and the irritation he had held during the negotiating process.88 The 1971 textile agreement was, by and large, a forced settlement squeezed out of the Japanese government at its time of maximum vulnerability.89 Stunned by the two "Nixon Shocks," the Japanese found it necessary to make themselves relatively independent of the United States, while the Nixon administration had no intention of combining the two radical policy changes with an eye to shocking the Japanese. As an editorial in Christian Science Monitor reported on that day, "the Japanese are both exhausted by and angry over America's strong-arm settlement of the two countries' textile feud. In the opinion of American and Japanese observers, exhaustion probably predominates."90 After the final agreement was signed on January 6 , 1972, the Nixon administration sought to establish "an interagency mecl~anismto implement the wool and man-made fiber textile agreements recently concluded with Japan, Hong Kong, Taiwan, and Korea . . . In addition to implementing the existing agreements, a policy is needed to plan future negotiating strategy on additional countries."9' However, already in the early 1970's, the textile industry was in the process of decline both in the U.S. and Japan. A decade later, the U.S. import of textiles from Southeast Asian countries greatly increased because the industry with the lowest labor costs in the region could replace its counterpart in Japan or the United States. Due mainly to President Nixon's personal need to maintain domestic support in the southern U.S., the textile negotiations brought about a critical situation in the U.S.-Japan relationship.

This chapter has documented the process of Japan's economic submission to the United States after it was stunned by the two "Nixon Shocks." From the first "Nixon Shock" until the beginning of 1972, the Japanese government had no alternative but to yield to American initiatives, i.e., the announcement of radical changes in U.S. currency policy (the second "Nixon Shock), the "Trading with the Enemy" Act regarding Japan's textile exports, and the initiatives launched at the Smithsonian Conference which decided the new exchange rate. In the process, Japanese leaders' concerns and misunderstandings stemmed from their failure to perceive the new U.S. initiatives in terms of changes in the international system structure. Japan's economic concessions can be explained by the "alliance dilemma." The fear of abandonment emerged when Nixon announced the opening to China. Unlike the period before the announcement of the two "Nixon Shocks," Japanese leaders had thought that the common goal of containment could maintain the tight U.S.-Japan partnership where the

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U.S. government continued to provide Japan with security and economic guarantees. The "Nixon Shocks," however, confronted them with a situation in which undoubted friendship in postwar history would collapse due to the President's sudden initiatives. The fact that politicians and officials in the Japanese government sought to verify the U.S. real intentions regarding both the U.S. opening to China and the New Economic Policy, indicates that they were concerned if the previously-established U.S.-Japan relationship would be forced to alter radically. First, from today's point of view, it is clear that Nixon's announcement of a "New Economic Policy" on August 1 5 was planned independently from I
NOTES 'Tad Szulc, The Illuslon of Peace: Fo~ezgnP o ~ I cI)N' the Nzxon Yea~s(New Yorlz: The Vlk~ngPress, 19781, p. 417.

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'Undersecretary Johnson had a meeting with Ambassador Ushiba on July 18. After the meeting he sent ICissinger a ineino saying that "most Japanese officials admired and e n ~ i e dthe ability of the President to take such a bold step with regard to Peking . . . This was going to present serious problems to Sato." Memo from Undersecretary of State Alexsis Johnson to ICissinger, July 20, 1971; National Security accessed June 15, 2002). Archive (http://\v\i7\v.gwu.edu/-nsarcl~i~.~, %adalto Ogata, Norrzalization with China: A Comparative Study of U S . and Japanese Processes (Berkeley: Institute of International Studies, Uni~ersityof California, 1988), p. 37. 4Asahi Shinzbun (Asahi Newspaper), July 17, 1971. In his diary on July 16, Premier Sato wrote that "We should applaud [Nixon's announcement of the SinoAmerican rapprochement], but it will become difficult how to deal with Taiwan. Eisalzu Sato, Sato Eisaku Nikki (The Diaries of Eisaku Sato), Volume 4 (Tolzyo: Asahi Shiinhun, 19971, p. 377. Also, Sato sent a memorandum t o Nixon, dated July 17, saying that "Since the continued iinpro~ementof Sino-American relations will seriously affect the Asian region in the future, we cannot help paying attention to it. The Japanese government expects that, in terms of maintaining the established partnership between the U.S. and the Japanese governments, the U.S. government will conduct prior consultations with us on important issues including Chinese problems." Minoru ICusuda, Kusztda Minorzt Nikki (The Diary of Minorzt Kusztda) (Tokyo: Chuo ICoron Publishel; 2001), p. 801. Translation by the author. jIn the aimouilceineilt of the opening to China, Nixon also said that "our action in seelzing a new relationship with the People's Republic of China will not be at the expense of our old friends." It was difficult for most Japanese leaders, however, to take the statement at face value. 6Atsuhi ICusano, "Two Nixon Shocks and Japan-U.S. Relations," Research Monograph, No. 5 0 (Center for International Studies, Princeton Uni~ersit!; 1987), pp. 5-10. 'Fuji ICamiya, Rekishi no Naka no Nichi-bei Kankei (The U.S.-Japan Relatiom ship in a Historical Context) (Tolzyo: Shincho-sha, 1989), p. 147. Voshihide Soeya, Nihon Gaiko to Chugoku (Japanese Diplomacj~and China) (Tokyo: Keio Tsushin, 1995), pp. 63-67. 9Richard M. Nixon, R N : The Memoirs of Richard Nixon (New York: Grosset & Dunlop 1978), pp. 563-66; Ogata, Nornzalization with China, pp. 34-35. IOOgata, Norrzalization with China, p. 35. Also, Nancy Bernlzopf Tuclzer (ed.), China Confidential: American Diplomats and Sino-American Relations, 1945-1 996 (New Yorlz: Columbia University Press, 2001), pp. 246-47. l l J o a i ~ i ~Gowa, e Closing the Gold Window: Domestic Politics and the End of Bretton Woods (Ithaca: Cornell University Press, 1983), p. 175. I'Robert C. Angel, Explaining Economic Policy Failztre: Japan in the 1969-1 971 International Monetar)' Crisis (New Yorlz: Columbia University Press, 1991), p. 117. I3For instance, Memo from Peter M. Flanigan to the President, June 19, 1970; White House Central Files, CO, Box 4 3 ( C O 75); National Archives, College Park, MD. It expresses a concern that "neglect of [economic] considerations may account for unsatisfactory results in recent trade negotiations with Japanese officials." 14Memo from John B. Connally to the President, "International Monetary Reform," June 8, 1971; White House Special Files, President's Office Files, Box 11; National Archives, College Park, MD. Copyright 2003 by Taylor & Francis Books, Inc.

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IjYoshilzazu Miyazalzi, Nihon Keizai no Kozo to Kodo (The Strztctwe and Behavior of theJapanese Economy) (Tokyo: Chikuma Shobo, 1985), pp. 270-75. The U.S. position can he documented by the following memorandum: "I'ye been experimenting with communicating the significance of the monetary negotiations in simple t e r m legislators are likely to understand, i.e., more US iobs . . . I've tallzed to John Connally about translating a lot of this whole [monetary] negotiation into iobs." Memo from Peter G. Peterson to the President, "Progress Report- Trade Negotiations in Conjunction with Monetary Talks," December 10, 1971; White House Special Files, President's Office Files, Eox 15; National Archiyes, College Park, MD. Underlined in the original. 16Paul A. Volclzer and Toyoo Gyohten, Changing Fortunes: The World's Monejl and the Threat to Anwrican Leadership (New Yorlz: Times Boolzs, 1992), pp. 77-8 1. 1% the memorandum dated August 5, 1971, Arthur Burns, Economic Counselor t o the President, reported the readiness of the Japanese goyerninent to revalue the yen. H e said that the Japanese government would be ready to revalue the yen in response to Nixon's upcoming announce~nent,although it has been believed that few leaders in the Japanese government had been informed of the radical U.S. change. Memo from Arthur F. Burns to the President, August 5, 1971; White House Special Files, President's Office Files, Eox 1.3; National Archiyes, College Park, MD. Dear Me President: The Japanese Ambassador, who had requested an early appointment, has just told me that the Japanese Government would be quite willing to revalue the yen in conjunction with some international arrangement. They feel they cannot d o it unilaterally. As you may recall, the French Finance Ministel; Giscard d'Estaing, made a siinilar observation to me about France and suggested that we take leadership in hringing about a realignment of the exchange parties of major countries. 1Usahi Evening News, January 7, 1972, cited in ICusano, ''Tn70 Nixon Shoclzs," p. 21. l9Ibid. '0I.M. Destlel; Hideo Sato, Priscilla Clapp, and Haruhiro Fukui, Managing an Alliance: The Politics of US.-Japanese Relations (Washington, DC: Brookings Institution, 19761, chaps. 2 and 4. 21Sat0, Sato Eisaku Nikki, Volume 4, p. 388. Translation by the author. 2'I.M. Destler, Haruhiro Fulzui, and Hideo Sato, The Textile Wrangle (Ithaca: Cornell University Press, 1979), pp. 291-92. '3Morton H. Halperin and Priscilla A. Clapp, "Erito ni Miru Sengo-Amerika no Tainichi-kan (Ainerican Leaders' Perception of Japan in the Postwar Period)," Hidetoshi ICato and Shunsulze ICamei (eds.), Nihon to Amerika: Aitekoku Imeji no Kenkj'zt (Japan and America: A Stud)' on Mutual Perceptions), (Tokyo: Japan Society for the Promotion of Science, 1977), pp. 370-71. 2Tetter from Marshall Green t o G o Ito, April 3, 1996. Uilderlined in the original. 'jDestle1; et.al., The Textile Wrangle, pp. 292. '6Premier Sato's Speech to the Diet, cited in I<usano, "Two Nixon Shoclzs," p. 1. 2'Ibid., p. 2 2 2Wew York Times, January 6, 1972, cited in ICusano, Ibid., p. 33. Copyright 2003 by Taylor & Francis Books, Inc.

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'9Joji Watanulti, "Nihon-jin no IZoltusai-shaltai-lza11 (Contemporary Japanese Perceptions of International Society)," Institute of International Relations, Sophia Uni~ersit!; Research Papers Series A-13, A-19, August 1972, Tokyo, Japan; Watanuki, "Nihon-jin no Tai-hei Taido (The Japanese Attitude toward America)," Chihiro Hosoya and Joji Watanulti (eds.), Taigai Seisaku Kettei Katei no Nichibei Hikaku ( A Corzparative Stud)' on U S . and Japanese Foreign DecisiomMaking Processes), (Tokyo: Tokyo University Press, 19771, pp. 29 1-3 10. XU. Alexis Johnson, The Right Hand of Power (New York: Prentice-Hall, 1984), p. 554. 31Memo from Theodore L. Eliot, J e to Peter G. Peterson, "Japan," August 14, 1971; National Security Archive, Washington, DC. 31.M. Destler, "Organizational Approaches and their Foreign Policy Impacts: The 'Nixon Shocks,"' mimeo, 1974, pp. 5-6. "Memorandum of Conversation by the President, Alexander Haig, James Wickel, and Nobusuke ICishi, October 22, 1971; National Security Archive, Washington, DC. 34Raymond L. Garthoff, Ditente and Confi.ontation: American-Soviet Relations f i . 0 ~Nixon ~ to Reagan, Revised Edition (Washington, DC: Brooltings Institutions, 1994), p. 271. Regarding Soviet perceptions of the Sino-American rapprochement, see Georgi Arbatov and William Oltmans, The Soviet Viewpoint: N o Alternative to De'tente (New York: Dodd Mead, 1981), pp. 164-69. 3jGene T. Hsiao and Michael Witunski (eds.), Sino-American Norinalization and Its Policjl Implications (New Yorlt: Praeger Publishers, 19831, pp. 159-61. "Richard C. Thornton, The Nixon Kissinger Years: The Reshaping of American Foreign Policj; Second Edition (St. Paul: Paragon House, 2000), p. 345.. "Garthoff, Dc'tente and Confrontation, p. 275; Andrei Gromyko, Memoirs (New York: Doubleda!; p. 257. 3"he Japanese g o ~ e r n m e n suggested t that it was not until the Soyiets agreed to returning the four islands together that the Japanese government could have the peace treaty with the Soviets. This position remains unchanged until toda!; which has been the source of dispute between both states. "IZenro Nagoshi, Kurenmrin Himitsu-bunsho wa Kataru (Secret Documents in the Kremlin) (Tokyo: Chuo ICoron Publishel; 19941, p. 2.33. Translation by the author. 40Pelting NCNA International Service, February 4, 1972, in FBIS, February 4, 1972. "Nagoshi, Kurenulrin Hin~itszl-bunsho,pp. 223-30. "The "Second Nixon Shock" has been also called the "Dollar Shock" in Japan. 4jSzulc, The Illusion of Peace, pp. 455-56. 44Minoru ICusuda, Kusuda Minoru Nikki, p. 629. 4jAnge1, Polic)' Failure, pp. 122-23. "It should be noted that, out of G-7 countries, only the Japanese government continued to open the foreign exchange marltet for fourteen days after Nixon's announcelnent of the New Economic Policy. The reason why the Japanese goyernment made such a decision has been called an enigma in postwar history of monetary policy. In this study, howeyer, it is adequate to argue that eyen M O F officials had no way to deal with this radical change in the established monetary regime but to leave the marltet as it was.

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~'Yusuge Icashiwagi, Gekido-ki no Tsuka Gaiko (Monetary Diplomacj~in a Period of Tztrmoil), (Tokyo: ICinyu Zaisei Jijo Kenkyu-kai, 19721, pp. 1.33-36. 48Ange1, Policy Failure, pp. 128-29. 49Ushio Shiota, Kasztnzigaseki ga Furzteta H i (The Days That Shocked Kasztnzigaseki) (Tokyo: Simul Press, 19831, pp. 61-62. joAngel, Policj~Failure, p. 138. jlAngel, Ibid., pp. 140-41; Ushio, Kasumigaseki, p. 272. j'Angel, Ibid., pp. 148-49. 'jlbid, pp. 149-50. '4Ibid, p. 167. 'jTalzashi Hosomi, Aru Zaimukan no Oboegaki (A Vice Minister's Memoir), unp~iblisheddocument, p. 2. j6Ibid., pp. 2-3. j7Memorandum of Comersation at Los Angels Times Euilding, September 23, 1971; White House Special Files, Staff Meinher and Office Files, A1 Haig, Box 44 (General Speech Material); National Archiyes, College Park, MD. '8Nixon's News Conference, September 16, 1971, in George W. Johnson (ed.), The Nixon Presidential Press Conferences (New York: Earl M. Coleman Enterprises, Inc., Publishers, 1978), p. 207. j9IZashiwagi, Gekido-ki, pp. 141-42. bOHosomi, Oboegaki, pp. 3 1-32. 6lAnge1, Policy Failure, pp. 206-8. 62Ange1, Ibid., pp. 214-18; Hosomi, Oboegaki, pp. 47-80. In his diary on November 10, 1971, Premier Sato indicated that, "although stating that he had no specific demands at this time, Connally sometimes referred to Japan's need to pay a half of the U.S. military bases in Japan and 2.3 (or 24) percent of yen appreciation . . . Dreadful ideas." Sato, Sato Eisakzt Nikki, Volume 4, p. 462. Translation by the author. 63Ange1, Policj~Failure, pp. 223-24. 6Qccording to Robert D. Schulzinger, I
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'Xusano, "Two Nixon Shocks," p. 23; Chalmers Johnson, Japan: W h o Gouems?, T h e Rise of the Deuelopnzental State (New York: W.W. Norton, 1995), p. 158. Secretary of Commerce Maurice H. Stans also writes a similar statement in his memoir: "The problem rested on Sato's use of the phrase zensho shinzasu in his meeting with Nixon. The interpreter translated this as 'The Prime minister will accommodate your wishes,' whereas what Sato actually had in mind was 'I will d o my best."' Maurice H. Stans, O n e of the Presidents' Men: Twent)' Years with Eisem bower and N i x o n (Washington, DC: Erassey's, 19951, p. 159. 'jDestler, et.al., T h e Textile Wrangle, pp. 276-77. '4Memo from Harry Dent to Peter Flanigan, February 22, 1971; Memo from Flanigan to Dent, February 23, 1971; White House Special Files, Confidential Files, Box 63; National Archives, College Park, MD. 5' 111 the memorandum which directed Peterson's appointment as Assistant to the President, Nixon sought to "consider the international economic aspects [as] essentially foreign policy issues . . . under the general policy guidance of the National Security Council." Memo from the President, January 5, 1971; White House Special Files, President's Office Files, Box 83; National Archives, College Park, MD. '6Memo from Peter G. Peterson to the President, "Korean Textile Negotiation," June 15, 1971; White House Special Files, President's Office Files, Box 12; National Archives, College Park, MD. -//Destler, et.al., T h e Textile Wrangle, pp. 281-85. '"bid., pp. 286-87. '9Letter from President Richard Nixon to Prime Minister Eisaltu Sato, July 16, 1971; White House Special Files, Staff Member and Office Files, Peter G. Peterson, Box 1; National Archives, College Park, MD. "Because of the repeated failure of negotiations, the White House doubted the intention of the Sato cabinet to resolve the textile dispute through the industry's action. For instance, a White House official wrote regarding the industry's export restraints that "the Japanese industry program is no doubt based on date of export in part for reasons of administrative convenience." Memo from Jim Lolten to Peter G. Peterson, "Textile Import Monitoring Program," August 4, 1971; White House Special Files, Staff Member and Office Files, Peter G. Peterson, Box 4; National Xrchives, College Park, MD. 81Destler, et.al., Managing an Alliance, pp. 91-92. 81Watanulti, "Nihon-jin no Tai-bei Taido," pp. 6-13; Watanulti, "Nihon-jin no I
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90Christian Science Monitor, October 8, 1971, cited in Destler, et.al., The Textile Wrangle, p. 3 14. 9lMemo from Peter G. Peterson t o the President, "Executive Order on Textile Trade Agreements-Where Do We G o From Here?" January 29, 1972; White House Special Files, Staff Member and Office Files, Peter Flanigan, Box 11; National Archives, College Park, MD. Underlined in the original. 9'Robert Jervis, "War and Misperception," Journal of Interdisciplinar) Histor)', 18-4 (Spring, 19881, pp. 675-700.

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CHAPTER FIVE

SINO-JAPANESE NORMALIZATION AND THE END OF THE AMERICAN "ROMANTIC TRIANGLE"

JAPAN'S APPROACH T O CHINA AND THE INTO THE UNITED NATIONS

PRC'S ENTRY

As documented in Chapter 3, Premier Sato's initial perception was not necessarily anti-Chinese when he became prime minister. He sought to cultivate relations with both China and the United States, but this objective was prevented by his emphasis on the U.S.-Japan partnership. He had to choose either to ask the U.S. government to return Okinawa, or to cultivate economic and diplomatic ties with the PRC. Sato put his priority on the former, which, from the perspective of the Chinese government, was to make Japan a "reactionary U.S. puppet."' Given the situation, Nixon's announcement of an opening to China was to him a serious blow. Before receiving the news of IZissinger's trip to Beijing, Sato had often stated his sympathy for the United States. A few days before receiving the first Nixon "shock," he said in the Diet, "I trust the Americans. It is a mutual trust, and things would not get done with suspicion."2 Thus, the U.S. failure to notify Japan of the radical shift toward the PRC made Sato question the credibility of the United States. Foreign Broadcast Information Servzce reported on July 16 that "the Japanese delegation to the United Nations was stunned by U.S. President Nixon's announcement on his visit to China . . . A member of the delegation likened Nixon's move to Judo and said that he felt he was thrown over the shoulder on[to] the ground by the United States."3 The unprecedented Japanese confusion and turmoil that followed as a result of the first "Nixon Shock" exemplified Japan's fear of abandonment. That made Japan's attitude toward the United States more submissive in the short run, while at the same time setting a long-run search for greater independence. The submission was evident in U.S.-Japan bilateral negotiations of the period, while the greater independence emerged as Japan's approach to communist countries in East Asia diverged from that Copyright 2003 by Taylor & Francis Books, Inc.

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of the U.S., as it normalized diplomatic relations with Mongolia, the PRC, and North Vietnam. According to a member of the Asian Bureau at the Foreign Ministry, "there was resentment over the fact that the United States had gone ahead of Japan in opening up contact with China. Unless Japan got ahead of the United States in the actual normalization, the people would not accept such a verdict."4 Japan's independent movement toward the PRC became possible after the "Nixon Shock," because the U.S. opening to China removed the obstacles the U.S. government had imposed on the Japanese government during the first two decades of the Cold War. Despite Japan's expectations in terms of economic interests, successive U.S. administrations had not allowed the Japanese government to maintain diplomatic relations with the PRC. Yet even under these restraints, the Japanese business community had explored non-governmental, economic relations with the Chinese since the early 1950's. Some argue that the Japanese view towards China originally stemmed from the cultural and historical ties of more than a thousand years ago. For instance, Akira Okada, Consul General in Hong Kong, repeatedly proposed Sino-Japanese diplomatic normalization on the grounds of both countries' unique history of trade and cultural exchanges which had lasted for thousands of years2 Moreover, Shigeru Hori, Secretary General of the Liberal Democratic Party (LDP), argued that he wrote a confidential letter to Zhou Enlai in October 1971, recalling that "the Japanese had a long history with the Chinese. As a fellow inhabitant of Asia, Japan must be more responsible for Asian affairs."G In reality, however, the Japanese perception of China before the 1972 normalization had been more pragmatic. LDP members, business groups, and MITI all considered the importance of China in terms of Japan's access to its enormous market. Except for a limited number of pro-China politicians who had historical and cultural sympathy, all had been pragmatically fascinated by China's low labor cost, purchasing power, and the mainland's wealth of natural resources.' Business groups in western Japan, who had lived in China before World War 11, demanded that, no matter who was in power, the Japanese government increase governmental contacts during the 1950's and 60's in order to promote economic exchanges. Within the Japanese bureaucracy, MITI had been more pro-Chinese in the same fashion, while the Ministry of Foreign Affairs had found it more favorable to enhance its partnership with the United States.8 A similar kind of pragmatism was also seen in Japanese opposition parties. In postwar history, the Japan Socialist Party (JSP) had sought to cultivate ties with China by making use of business groups. In the process, the JSP and the business community became so interdependent that the former came to seek financial assistance from the latter, and the latter asked the former to introduce Chinese foreign trade authorities.' Since the JSP sought to utilize the established non-governmental channels to gain its own political influence in domestic politics, Chinese leaders became increasCopyright 2003 by Taylor & Francis Books, Inc.

Sino-JapaneseNormalization and End of American "Romantic Triangle" 81 ingly suspicious of the JSP, and became less inclined to try to use it to get access to the Japanese government. Prodded by political parties, business groups, and major ministries after Nixon's announcement, Premier Sato himself began to search for intermediaries. Unlike the situation in the United States, there was no shortage of back channels for communication with the Chinese."J The Premier, however, had to consult with the U.S. government in reaching this objective. Sato wanted to approach the PRC government with an eye to resuming Sino-Japanese diplomatic relations, but U.S. non-recognition of the PRC (and continuing U.S. support for Taiwan's seat in the United Nations) prevented any hasty action on his part. Given the situation, the Sato cabinet was confronted with the dilemma of either following U.S. foreign policy toward Taiwan and thereby alienating the Chinese, or rushing into rapprochement with the PRC government and alienating the Americans. The "PRC-Taiwan" Issue: Adjusting Japan's Interests to U.S. Interests The Nixon administration's opening to China sought enhanced leverage in negotiations with the Soviet Union over Vietnam, trade, and arms control, and did not represent a deliberate effort to damage relations with U.S. allies. The PRC's principle of "one China," however, forced the U.S. government to reconsider its policy of supporting Taiwan's seat in the United Nations in pursuing rapprochement with the PRC. When I
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would support action at the General Assembly calling for a seat for the PRC, while at the same time it would oppose any action to expel the Republic of Chi11a.I: Already in 1970, in response to the victory of the Albanian resolution, in which Albania had played a key role in proposing the entry of the PRC into the U.N. to replace Taiwan, the U.S. government, backed by Japan, the Philippines, and other allies, altered the procedure for the PRC's U.N. entry from the simple majority system into what was called the "Important Question Resolution ( I Q Resolution)," meaning that twothirds of a General Assembly vote would be necessary to change the status quo. The issue of co-sponsoring the U.S. proposal created intense discussion among Japanese leaders. In the governing Liberal Democratic Party (LDP), pro-PRC Diet members and other anti-mainstream leaders opposed the idea of co-sponsorship, and suggested that the Japanese government pursue the resumption of diplomatic ties with the PRC under the principle of "one China." The pro-Taiwan groups, on the other hand, being sympathetic with Chiang for his decision to renounce Taiwan's right to war reparations from Japan after World War 11, argued that Nixon's upcoming trip to Beijing would not necessarily soften ideological tensions between the U.S. and the PRC, and that the Japanese government had to cooperate with the U.S. government in protecting Taiwan's security. In the Japanese Foreign Ministry, while feeling betrayed by Nixon's sudden announcement in July, major officials were still unclear about how to deal with the new SinoAmerican accommodation, and continued to insist on cooperating with the U.S. policy of sustaining Taiwan's representation.14 Since the intraparty dispute did not abate, the LDP decided to take the agreement to the executive. Although feeling that his decision to value one stream within the party would heighten criticisms from the other, Premier Sato announced on September 22 that Japan would be a co-sponsor of the U.S. proposal. He said at a press conference that, "given Taiwan's respect for the U.N. charter, Japan had to act to avoid Taiwan's banishment from the United Nations . . . [A]lthougl~there was no prospect of the U.N. passing the Japan-backed U.S. resolution, it was important for Japan to make an assertion that would be appreciated by the international community."l The above statement indicated that Sato and many LDP members felt morally obligated to defend Taiwan. The Premier thought it unjust to renege on Chiang I
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have to await the outcome of the voting at the U.N. General Assembly, and Premier Sato would have to decide Japan's position between the PRC and Taiwan. As soon as Sato's decision was reported, People's Daily condemned the U.S.-Japan co-sponsorship. It criticized the two states' collaboration to protect Taiwan's seat: [Tlhe U.S. Government, in league with the reactionary Sato government of Japan, finally dished up in the United Nations . . . two resolutions on so-called Chinese representation. . . One is the so-called "important question" resolution . . . This reveals that U.S. imperialism persists in its hostility towards the Chinese people . . . [The other] "dual representation" resolution of the United States is also entirely untenable . . . The lively reality is: there is only one China in the world, namel!; the People's Republic of China. Taiwan is an inalienable part of the territory of the People's Republic of China. The Chiang I
From the above perspective, Japan's collaboration with the U.S. in its strategy was viewed as anti-Chinese by the PRC government. During the fall of 1971, Japanese leaders were plagued by the "Nixon Shocks," which relegated them to the role of spectator to the accommodation between the U.S. and the PRC. At the same time they were criticized by the Chinese as reactionary, despite their genuine interest in improved ties with the PRC government. Japanese foreign policy at that time simply had no satisfactory way to address the sudden change in the East Asian international environment. Former Japanese Prime Minister Nobusuke IZishi was concerned about the prospect of Taiwan's seat in the General Assembly. Just before the U.N. voting, he visited the White House and said to Nixon, "[Chiang IZai-shek] could not bear the humiliation of being expelled by the vote of those more recently admitted to the UN if the reverse-IQ Resolution [Important Question Resolution] failed . . . The IQ Resolution co-sponsored by Japan and the United States . . . faced great difficulties . . . [I hope] that the United States would also exert its maximum influence on those governments with which it has greater influence than Japan."l' IZishi wondered whether the victory of the PRC seat would place the Sato cabinet in a political bind between pro-PRC and pro-Taiwan LDP members. In response to IZishi's explanation of Japan's China policy, Nixon said that the U.S. would do all that it could, particularly to persuade ten nations now on the fence to support the resolution.1" The U.S.-Japan co-sponsorship to sustain the Taiwanese seat in the U.N., however, did not last. The result of the U.N. voting on October 25 was disappointing for the U.S., Japan, and Taiwan. The I Q Resolution on the expulsion of Taiwan was defeated by fifty-five to fifty-nine, with fifteen abstentions. It was the Albanian resolution that ultimately passed by an

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overwhelming majority of seventy-six to thirty-five, with seventeen abstentions. So, the dual representation resolution would not even be voted on. Although somewhat predictable before the U.N. voting, the victory of the PRC and the expulsion of Taiwan put the Sato cabinet into a difficult situation." After having Japan's co-sponsorship defeated, the Sato cabinet became explicitly eager to pursue Sino-Japanese normalization. O n the other hand, the New China News Agency (NCNA) praised the entry of the PRC into the U.N.: The welcoming speeches of many representatives were filled with enthusiasm and warmth expressing confidence, encouragement and fraternal feelings toward the Chinese people . . . co-sponsoring countries which upheld principle and justice for their unremitting and fruitful efforts to restore China's legitimate rights in the United Nations."?o

Yet, the Chinese victory at the U.N. actually came as quite a surprise to Zhou Enlai and the other Chinese leaders. Given Zhou's statement that the Chinese did not place much importance on the U.N. question at the time of Kissinger's secret visit to Beijing, the Chinese did not anticipate such a favorable result.21 After the I.Q. Resolution was defeated, the U.S. government found a need to reconsider U.S. influence at the United Nations. The NSC directed a study of "the implications for U.S. policy and strategy of participation by the People's Republic of China in the United Nations, related agencies, and multilateral negotiations."22 In the Japanese government, despite criticisms from opposition parties, the Sato cabinet sent a confidential letter (the Hori letter) to Zhou Enlai, stating Japan's intention of recognizing the "one China" policy. The Hori Letter Although Premier Sato decided to co-sponsor the I Q Resolution in order to ensure the U.S. reversion of Okinawa, from the very beginning, many Japanese leaders found it dubious that the U.S. government had serious intentions of maintaining Taiwan's U.N. seat. In the midst of the U.N. voting in October, Kissinger conducted his second visit to Beijing, and discussed with Zhou the wording of the communique for Nixon's upcoming visit. From the Japanese perspective, his trip was to betray Japan's decision to co-sponsor the Taiwan's U.N. seat. Regarding the concurrence of his trip to China with the U.N. voting, Kissinger stated after his return to the U.S.: For us to have double-dealt Formosa would certainly not have been in the interest of long-run cooperation with the Mainland Chinese. It would be dishonorable for us to deal with the problem that way, and we would h a x lost our credibility with the Peking leadership . . . The concurrence of the end of my trip with the UN vote was really just a painful coincidence.23

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Despite Kissinger's emphasis on the "coincidental" concurrence, Japanese leaders felt betrayed by the Nixon administration. During October, 1971, they were puzzled by the Americans' high-handed attitude toward Japan's restraints over textile exports, and the issue of Taiwan's U.N. seat. Right after the settlement over textiles, Kissinger's second trip to Beijing left Japanese leaders with serious questions over the U.S. government's real intention~.~~ While cooperating with the U.S. government, however, the Sato cabinet already began to look for informal coininunication lines to contact the PRC government. There was an informal Hong Kong channel through Coilsul General Akira Okada. But the most important effort was made by LDP Secretary General Shigeru Hori, who undertook to prepare a confidential letter in November, 1971, and passed it to Premier Zhou Eillai through Tokyo Governor Ryokichi Minobe. The letter was written by Mineo Nakajima, a member of Sato's private policy group consisting of university professors.2j It included Japan's concession regarding the Taiwan issue, stating that "I understand and recognize that there has been one China, which is now represented by the PRC, and that Taiwan has been a part of the territory of the peoples of China."26 The wording, however, had two problems for the Chinese. When the Koineito (Clean Government Party) delegation visited Beijing in July, 1971, Zhou articulated three principles for the restoration of both states' diplomatic relations: (1) The government of the PRC is the sole legal government of China. ( 2 ) Taiwan is an inalienable part of the territory, or p r o ~ i n c e of , the PRC. ( 3 ) The so-called JapanTaiwan Peace Treaty is illegal, yoid, and should be denounced.?'

In terms of the principles, the Hori letter was unclear about whether the Japanese government recognized the PRC as the sole government of China. Moreover, given the wording that "Taiwan [was] the Chinese people's territory," Zhou was suspicious of the Japanese government's intentions regarding the notion that Taiwan was "an inalienable part of the territory, or province, of the PRC."2Ghou publicly disclosed the contents of the message, and criticized it as unsatisfactory to the Chinese government. He believed that ambiguity surrounding the Japanese view of Taiwan's status would lead to a "two Chinas" solution, and made it clear that the PRC had no intention of resuming Sino-Japanese diplomatic relations as long as Sato was prime minister of Japan. Although not meeting the PRC government's "one China" principles, the significance of the Hori letter lies in the fact that it represented a shift in the Sato cabinet's attitude toward the PRC. The next section documents how the Nixon administration viewed Japan's hasty action toward the PRC, and how both governments reconciled the differences in their China policy.29

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THEU.S. FEAROF JAPAN AND THE NIXON-SATO MEETING IN SANCLEMENTE The U.S. Concern over Japan's Approach to the PRC The fact that the Sato cabinet, which seemingly cooperated with the U.S. government to co-sponsor the "Two Chinas" policy, secretly initiated contact with Chinese leaders surprised the Nixon administration. From November, 1971 through March, 1972, Premier Sato increasingly modified Japan's position over the status of Taiwan with an eye to satisfying Zhou's concerns. Altl~ougl~ the Chinese government did not respond positively to Sato's initiatives, President Nixon was not pleased to find out that Japan had initiated contact with the PRC without first consulting the United States.30 Despite being irritated, some officials in the Nixon administration recognized Japan's sense of grievance. For instance, Assistant Secretary of State Marshall Green, who was concerned about the deterioration of U.S.Japan relations due to Nixon's sudden announcement, suggested that President Nixon greet Emperor Hirohito at the Anchorage A i r p ~ r t . ~The ' Emperor was on his way to Europe in November, 1971, for his first trip abroad. Former Ambassador to Japan Edwin Reischauer also lamented that "[Richard Nixon] committed a very silly act" by arranging his PRC trip without first consulting Japan. He said that the President's meeting with Hirohito would be "a nice gesture but it doesn't amount to much else. The Emperor has no power what~oever."~2 Former Secretary of State Dean Rusk also said, "What kind of price [is] Peking going to charge us? More involvement by [the Department of] State might have enabled [President Nixon] to avoid upsetting Japan to such a ~legree."~3 The concerns of the Japan-related State Department staff was disseminated to both Nixon and Kissinger in October. When the ABC Today Show reported that Japanese Prime Minister Sato had "disinvited" the President to visit Japan, ICissinger became upset about the news, and directed his staff to verify whether or not it was true. Althougl~finding out that "[wlhat Sato [really] said was that he did not think it would be appropriate for you to stop off in Japan on your way to or from your Peking t r i ~ , " ~ l the press speculation on Premier Sato's "disinvitation" of Nixon to Japan astonished Nixon and Kissinger. The press in Japan emphasized that Nixon's announcement of the SinoU.S. accommodation preempted the resumption of both states' diplomatic relatioi~s.~' Former Premier ICishi told Nixon that "[tlhe announcement of the President's visit to Peking had prompted the press in Japan to conclude that the United States would normalize relations with the PRC, and that Japan had fallen far behind . . . The Press severely criticized the Sato Goveri1ment."~6 Survey data of various newspapers between late 1971 and early 1972 indicated that more than 80 percent of the Japanese people believed that Japan would have to move ahead toward normalizing diplomatic relations with the PRC."' Copyright 2003 by Taylor & Francis Books, Inc.

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Given the unintended Japanese reactions, the Nixon administration had no alternative but to try to persuade Japanese leaders that the U.S. accommodation with the PRC would not change its policy toward Japan. When Foreign Minister Takeo Fukuda visited Washington in September, 1971, the President assured him that "[in] our discussions with the PRC, there are no conditions on either side . . . Each side is as aware as the other that we are beginning a basic dialogue . . . [Tlhe necessity is clear for continued close relations between the governments of the United States and Japan."3" Considering the Sato cabinet's difficult situation in domestic politics, Nixon could not but state that "[ilt is important [for us] to recognize what the United States position is, to respect the position the [Government of Japan] is in, and to point out the need for each government and nation to determine its own course of action on the basis of its own national interests.":' He was discovering that this Administration's failure to consider the impact on Japan of the new Sino-American relationship might have unpleasant consequences.40 As documented in Chapter 3, Chinese leaders were also afraid, in their meeting with I
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sized a need for close bilateral consultations on foreign policy issues, the maintenance of the U.S.-Japan security treaty, and the U.S. provision of a nuclear umbrella in the Far East. The President stated that "his forthcoming trip to Peking would in no way be at the expense of the commitments the United States has to its friends and allies in the Pacific, Japan, the ROK [the Republic of Korea], and Taiwan."44 Despite Nixon's statements, when the discussion turned to China, Premier Sato severely criticized the ambiguity of U.S. China policy, which sought to maintain Taiwan's seat even after the announcement of the SinoU.S. accommodation. In response to Nixon's statement that "what would come out of the meeting is not normalization in the conventional sense . . . [but] a channel of communication and progress," Sato said that "Japan's view is quite different," and asked "how the President evaluated the UN invitation to seat Peking by adopting the Albanian resolution."4j Since the 1969 U.S.-Japan summit had ensured protecting Taiwan as a security requirement in the Far East, Sato thought that continued U.S. support for Taiwan restrained Japan's approach to the PRC. President Nixon answered: [W]e accept that fact, because as a member of the world body, we should accept majority rule. However on the other hand, we would stick to our national policy of continuing to h a x relations with the R O C [the Repuhlic of China] and of maintaining our defense agreement. In [my] view, iinportant as the UN is, it could not be allowed to dictate the policy of a great nation. The UN is one world, and there PRC is the only government of China. We have relations with the government on Taiwan and are beginning discussions with the PRC. I recognize that this seems inconsistent . . . We believe that in the long historical process this should he decided peacefully by the two of them. Meantime, we h a x a long history of friendship, alliance and defense arrangements with the R O C and will continue this relationship.46

The statement, however, did not satisfy Premier Sato. Feeling that "the United States did not seem to understand Japan's position and Japan did not understand the United States position," Sato explained that "Japan must view the PRC as the representative of China . . . [and therefore] is attempting to normalize its relations with Peking."4' After considering Sato's independent attitude, Nixon stated the next day that "each nation would have to make its own independent decision, but that we should consult fully with each other with respect to changes of policy." Sato countered that "[tlhe announcement of the President's visit to Peking came as a great shock. I understand that this was not arranged behind Japan's back but the Japanese people do not share your understanding. Japan is ahead . . . in de facto relations, such as trade . . . The PRC attitude toward the United States in 1969 so resembles the PRC attitude toward Japan today."4"11at is, the Premier emphasized China's willingness to initiate governmental contact with the Japanese.

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The meeting ended with both states' differences toward China unresolved. An editorial in the New York Times reported on the fruitless outcome of the meeting, noting that "[ilt is evident that the two governments no longer have common policies, particularly on China. The coininuniquC was silent on critical issues of Taiwan and Korea . . . but [Sato] already has begun to loosen Japan's commitments to Taiwan."l9 When February arrived, the Nixon administration realized it needed to consider the impact on U.S. allies of the President's upcoming visit to Beijing. A White House official warned the President that "[ilt is important that the Japanese be given a complete report on the talks. The San Clemente discussions did not reduce the sense of unease about future US intentions in the region . . . The manner in which the Peking trip was organized has raised grave doubts in the minds of J a p a n e ~ e . " ~After o the announcement of the Shanghai Communique, the U.S. government decided to send Assistant Secretary of State Marshall Green and NSC staff member John Holdridge to its allies in East Asia, in order to inform them of the U.S.-PRC negotiations, and to soften the possible inisperceptions and turmoil there. They first went to Japan by flying directly from Beijing to Tokyo, which no plane had done during twenty-three years since 1949. Premier Sato and Foreign Minister Takeo Fukuda were anxious for inside information beyond what had already been announced publicly. Before their arrival in Tokyo, the Japanese government had already made favorable official statements about the Shanghai CommuniquC, and the visit of the two American officials was meant to remove any suspicions regarding secret deals in Beijing. In Taiwan, where people had a more intense fear of abandonment than the Japanese, Chiang h i - s h e k refused to see Green and Holdridge, although he sent his son Chiang Chingkuo, premier at that time, to see them. Green and Holdridge emphasized that while modifying its policy toward Beijing, the U.S. government would not change its relations with the ROC, and that it still expected to encourage more trade and investment in Taiwa11.j' As seen in Premier Sato's statements to President Nixon at the San Clemente meeting, the Japanese government began to distance itself from U.S. China policy, seeking to initiate governmental contact with Beijing. I
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Alliance in Anxiety JAPAN'S AUTONOMY FROM THE UNITED STATES AND THE NIXON-TANAKA MEETING IN HAWAII Nixon and Kissinger-at least momentarily-had placed more emphasis on the American strategic need to maintain a number of options in negotiations with the Soviet Union, and to prevent the Department of State or domestic opposition from interrupting the initiative, than on maintaining the partnership with U.S. allies. As a result, the sudden announcement of the Sino-American accommodation generated fear among the allies that the established relationship with the United States could collapse. When the Japanese government responded by announcing its intention to resume diplomatic relations with the PRC and North Vietnam, the U.S. government also experienced similar fear. Japan might now race toward rapprochement with the PRC and North Vietnam, leaving U.S. Asian policy in a shambles. The following addresses first the Nixon administration's concern over Japan's approach to North Vietnam just after the Sail Clemente meeting ended, and second when Japan's new Premier, ICakuei Tanaka, pledged Japan's quick normalization with the PRC. The U.S. Concern over Japan's Approach to North Vietnam Along with the Sato cabinet's pursuit of contact with Chinese leaders, some officials in the Japanese Foreign Ministry sought the possibility of expanding economic and political relations with North Vietnam. Given the fact that the Indochinese peninsula had been well-known for its the extraction industries (especially coal mining) before and during World War 11, the Japanese had a good reason to cultivate economic, if not political, ties with North Vietnam. Shocked by the failure of the U.S. government to notify Japan of the accommodation with the PRC, Japanese officials reconsidered their policy toward the communist countries with which successive U.S. administrations had forbidden Japan to have diplomatic and even economic relations.'3 From the U.S. perspective, Japan's support for U.S. involvement in Vietnam had been a quid pro quo for the U.S. reversion of Okinawa. At the Johnson-Sato meeting in 1967, the Premier's statement supporting U.S. involvement encouraged President Johnson to agree that the Okinawa reversion date should be decided between the two governments "within a few years on a date satisfactory to them."'4 The Nixon administration decided to return the island in 1969, under the condition that the reversion did not reduce U.S. military capabilities in the Far East. Moreover, Nixon once stated to British Prime Minister Edward Heath that the United States fought in Vietnam for the sake of Japan: Japan is today denied a nuclear capability: in terms of security, if our nuclear umbrella should become less credible, the effect on Japan would be a catastrophe. The biggest reason for our holding on in Vietnam is Japan. (An example of that is the impact the end of the bombing had on the Copyright 2003 by Taylor & Francis Books, Inc.

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Japanese.) We have to reassure the Asians that the Nixon Doctrine is not a way for us to get out of Asia hut a way for us to stay in. They must see that the China trip is not taken at their expense . . . We mustn't leaye Japan completely isolated. We give aid stupidly: the Japanese giye aid too selfishly. We shouldn't resent that if the Japanese play a constructive role ultimately; it won't necessarily be the same kind of role as ours.jj

In the Japanese government, however, the anti-U.S. feelings after the "Nixon Shocks" undercut Japan's interest of cooperating with the U.S. foreign policy objectives. Foreign Minister Takeo Fukuda permitted visits by members of the Foreign Ministry to Hanoi in early 1972. Backed by Japanese leaders' feelings that they were betrayed by the U.S. over the China policy, the Sato cabinet was increasingly eager to cultivate ties with North Vieti~am.~G When the Japanese government informed the Nixon administration of the Foreign Ministry officials' visit to Hanoi just after the Sail Clemente meeting, the Nixon administration became concerned that Japan's hasty overture toward North Vietnam would make obstacles to the Nixon administration's effort to end the Vietnam War. In early 1972, President Nixon made a speech that was designed to put pressure on North Vietnam by promoting the positive relationship with both the Soviet Union and the PRC, supporters of North Vieti~am.~' The Administration also decided to carry out bombing of the North again, seeking to bring the war to an armistice. From this perspective, Japan's approach to North Vietnam was only to create obstacles to the Nixon-I
U.S. Concern over Japan's Normalization with the PRC As of early 1972, it had been more than seven years since Sato had become prime minister. Normalization with the PRC was becoming a succession issue as prospective Diet members began to rally for the next prime minister. The two leading contenders were Takeo Fukuda and Kakuei Tanaka. Foreign Minister Fukuda, whom Sato had wanted to take over as prime minister, was very cautious in moving ahead toward normalization, because he had to pay attention to many Taiwan supporters in his faction.'X As MITI Minister, Tanaka was more advantageous to Fukuda, for the ministry had been entl~usiasticabout cultivating economic ties with the Chinese.

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Once Sato had achieved the formal reversion of Okinawa on May 15, 1972, all contenders started to openly agitate against each other, asserting that the China issue should be handled by the next prime minister. For the first time in postwar history, a foreign policy agenda became the key issue in choosing the prime minister. As time went by, competition between Fukuda and Tanaka turned increasingly intense, and the LDP decided that there was no other way but to coilduct an intraparty election. As a result, Tanaka became prime minister because he succeeded in mobilizing the support of the Ohira and Miki factions. The Miki faction requested his cominitment to normalization as a condition for its electoral support.59 During the electoral campaign, Tanaka pledged that he would normalize Japan's diplomatic relations with the PRC. O n his July 7, 1972 inauguration day, he announced that the new cabinet would expedite the process of Sino-Japanese normalization, and Foreign Minister Masayoshi Ohira stated that either the Premier or the Foreign Minister would be ready to visit Beijing for that purpose. About a decade later, Tanaka recalled his feelings when he proclaimed a need for quick normalization with China: Issues over Sino-Japanese relations have been more a domestic problem than a diplomatic one. In Japan's one hundred year history since Meiji, the Chinese h a x been the largest problem for each cabinet. I think it is not good for Japan to see Sino-Japanese relations as domestic problems. More than two-thirds of the domestic uneasiness and irritation in domestic politics will disappear once we soften the bilateral relationship. This is the first principle. Second, if we add Japan's one hundred million people to eight or nine hundred million of the Chinese population, it will he about one-fourth of the world population. There can he no Japanese stability, unless we resolve the Sino-Japanese relations. The third principle regards issues of Japan's security. There are three critical places in the world: the Berlin Wall, the 38 degree line in Korea, and Cuba. These are the three linchpins of the East-West confrontation. There can he no peace in East Asia nor in Japan unless peace exists in these three places. So, Japan must c u l t i ~ a t efriendly ties with China, along with maintaining the U.S.-Japan security treaty. If we create a triangular relationship between Japan, the U.S., and China, we can maintain peace in the Far East. We can create a stronger security system with the triangle than in building a NATO-type institution in Asia if Japan normalizes its diplomatic relations with China.60

Regarding Tanaka's perception of the United States, there was a remarkable contrast compared with Sato's. Although belonging to the same mainstream faction as Sato, Tanaka was not as pro-U.S. as Sato had been. The basic principle in his approach to foreign policy was that Japan should pursue its own national interest, independently of the United States if needed. He stated that Japan could cultivate ties at times even communist countries. Working under this principle, Tanaka conducted a very quick

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overture toward the PRC, and immediately succeeded in normalizing SinoJapanese diplomatic relations.6' Tanaka's relatively independent attitude toward the United States inspired concern in the Nixon administration regarding the terms of the Sino-Japanese normalization. Although Tanaka had no intention of changing the established U.S.-Japan relationship, the U.S. government feared consequences of the new Sino-Japanese relations. Two weeks after Tanaka became prime minister of Japan, a White House official sent a memo to I
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In effect, the U.S. fear of Japan's quick movement toward the PRC was an unintended byproduct of the Nixon administration's China policy. It first planned the rapprochement without detriment to Taiwan and Japan. The Taiwanese, however, struggled with the fear of abandonment, and the Japanese began to make every effort to normalize relations with Beijing, paying little attention to its history of support for Taiwan.66 Assistant Secretary of State Marshall Green recalls that, during his flight to Hawaii for the August, 1972, U.S.-Japan meeting, the main concern for the U.S. government was that "Tanaka might normalize" the relationship with the PRC "on terms adversely affecting US interests."6' More specifically, U.S. concern centered on whether or not Japan's area of the security guard would include Taiwan. The President and the new Premier discussed the issue at the summit, which was held for the first time in the history of the U.S.-Japan alliance in a place mid-way between Tokyo and Washington, that is, Hawaii.

The Hawaii Meeting (August 31-September 3, 1972) There were two reasons why the U.S.-Japan summit was held only six months after the previous meeting in Sail Clemente. First, since Tanaka had replaced Sato as Japanese prime minister in July, both Nixon and Tanaka wanted to maintain the U.S.-Japan partnership after the change of leadership. Second, given the fact that Tanaka seemed more eager than Sato to seek Sino-Japanese normalization, the Nixon administration needed to discern the Premier's intention regarding normalization. Specifically, the President wondered whether "the manner in which the Peking trip was organized has raised grave doubts in the minds of Japanese leaders about the level of confidence they should have in the US . . . [since] the Sail Clemente discussions did not reduce the sense of unease about future US intentions in the region."68 The news that the President chose to hold the meeting in Hawaii surprised Japanese leaders. In the past, U.S.-Japan summits had been conducted in Washington by successive Japanese premiers visiting the U.S. capital. Nixon stated at a press conference that "we could have no better proof of the fact that the war is over, not only the shooting but also the enmity, than the fact that we are having this meeting . . . in Hawaii, where the war began."69 Some in the Japanese press reported that the President's decision stemmed from feelings of remorse for his failure to notify Japan of the accommodation with the PRC.'O There were two major purposes for the Hawaii meeting. The first was to exchange views and to try to adjust both states' perceptions of their interests concerning Japan's normalization with the PRC.'' Nixon wanted to verify Tanaka's intention of maintaining the U.S.-Japan relationship when the Japanese government sought to normalize Sino-Japanese relations. The Chinese government had already decided not to oppose the allied relation-

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ship between the U.S. and Japan, but to utilize it as the mechanism which would restrain Japan's anticipated military expansion. Zhou stated to the Komeito during its visit to Beijing in July that the Security Treaty would not be an obstacle to the PRC-Japanese normalization. Although there was concern that the PRC government would insist on excluding Taiwan from the U.S.-Japanese security umbrella, Tanaka stated to Nixon that Japan's normalization with the PRC would not diminish the utility of the security relationship with the United States. In the agreement between the two leaders: [i]t was stressed that the maintenance and strengthening of the close ties of friendship and cooperation between the two countries would continue to be an important factor for peace and stability in the e ~ o l v i n gworld situation. Both leaders . . . agreed that the two govxnments would continue to cooperate through close consultations with a view to ensuring smooth and effective implementation of the [U.S.-Japan Security] Treaty.'2

The second purpose of the meeting for Nixon was to discuss economic issues. Even after the December, 1971, Smithsonian Conference, U.S. trade deficits of 3.4 billion dollars a year were not reduced, and there was a feeling in the U.S. administration that measures for resolving the trade imbalance should be discussed at the upcoming meeting. As far as the currency realignment was concerned, the press doubted that the United States was asking Japan for another revaluation of the yen in the near future. But the final joint statement only noted that both "shared the view that fundamental reform of the international monetary system is essential."'^ O n the contrary, regarding trade issues, Tanaka satisfied Nixon by announcing the imminent purchases of 1.1 billion dollars of U.S. goods, including agricultural products, uranium, and jet planes.'4 However, the substance of the agreement was questionable. For one thing, arranging the purchase of uranium would require long-term negotiations. Moreover, the worldwide worsening of weather in 1972 drove U.S. agricultural products not to Japan but to the Soviet Union. President Nixon wanted Japan's promises regarding the purchase of U.S. products, and aimed to advertise his efforts to reduce the U.S. trade deficit so that he could gain domestic support for his electoral campaign."

The Role of the Komeito (Clean Government Party) During the process of Sino-Japanese normalization, many JSP and LDP politicians sought to play a role as intermediaries between the two governments. The JSP, along with the business community in western Japan, had been deeply involved in trade activities with China ever since the 1950's. The PRC government, however, chose the Komeito as the sole trustworthy intermediary. The party was financially self-sufficient, thanks to its funding by a religious group called Soka Gakkai. The fact that the party was finan-

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cially well-off appealed to Zhou, because he understood that the Japanese had regarded the Chinese as a mere market. He made a report on the international situation in December 1971, saying that "[Regarding Japan], Sato gets more and more erratic. But, for the time being, it is the Japanese Communist revisionists and the Komeito that are the most capable of summoning the masses."'6 From the Chinese perspective, the JSP and the LDP viewed China as a means to gain their own economic advantages. For instance, many proChina JSP and LDP members of the Diet brought their pamphlets to Beijing, and advertised their activities. Private companies and JSP members were particularly interdependent: the former depended on the latter in getting access to the Chinese foreign-trade authorities, and the latter on the former in gaining financial assistance for its own activities. In this light, PRC leaders were impressed by the Komeito, which did not provide the party's pamphlets for its own political purposes, or advertise the party's interest in China as Japan's market." At the governmental level, the Chinese were aware that a prolonged negotiation by the Foreign Ministry would play into the hands of the pro-Taiwan members of the Diet, so they preferred a way to reach swift political settlement. The Chinese trusted the Komeito and its Secretary General Yoshikatsu Takeiri, who was in close contact with Tanaka, and asked the delegations to carry back the text of the negotiations.'" Given the background, the Komeito sent its delegations three times to Beijing. The first was conducted in June-July 1971, just before the first "Nixon Shock" occurred. As described earlier, Takeiri brought back the text of the basic principles for normalization, which originally included five items: (1)the PRC as the sole legal government in China, (2) Taiwan as a part of the PRC's territory, (3) the denunciation of the Japan-Taiwan Peace Treaty, (4) the U.S. withdrawal of armed forces from Taiwan, and (5) the restoration of the PRC seat in the U.N. and expulsion of Taiwan.'9 The principles were automatically reduced to three items since the last two were resolved by the U.S.-PRC agreement during Nixon's visit to Beijing, and the victory of the PRC seat in the U.N. in October, 1971, respectively.80 The second delegation, led by Fumizo Ninomiya, was invited by the China-Japan Friendship Association in May, 1972. Considering the difficulty of seeking normalization with Japan under the Sato cabinet, the PRC government wanted to collect information regarding who would be the next prime minister. On May 15, 1972, when Okinawa was returned to Japan, the delegation members met with Premier Zhou and were asked their opinions on Japan's next prime minister. Zhou stated that the Chinese would be willing to normalize diplomatic relations with Japan, provided that Tanaka became prime minister. He added that if Tanaka could come to Beijing, "he doesn't have to apologize for Japan's war crimes . . . we will wait for him to come with our Peking airport always open." Zhou asked Ninomiya to con-

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vey his message to Takeiri regarding his expectation that Takeiri would visit Beijing again, if Tanaka was serious about normalization. After Tanaka took office and pledged to normalize Sino-Japanese relations, the PRC government, secretly at first but in vain, invited a third Komeito's delegation. Despite the fact that a JSP delegation discussed the issue of normalization with the PRC government just before the arrival of Komeito, Zhou Enlai needed to ask about Japan's specific conditions regarding normalization. He asked Takeiri to convey the Chinese proposition of a joint statement (the "Takeiri memo") to Premier Tanaka." At the meeting, Takeiri voiced all the demands and apprehensions which he thought were held by the LDP. In Tokyo, he gave Tanaka the "Takeiri memo" on which the Japanese Foreign Ministry based Japan's position. Takeiri recounts that "the PRC government was quite eager to make accommodations with both the U.S. and Japan. It regarded normalization with Japan as important as rapprochement with the United States. I didn't see any differences in China's views between the two countries." Although his statement may exaggerate Japan's importance, it was nevertheless clear that the PRC government regarded coming terms with Japan as another important means to strengthen China's influence against the Soviet Uni0n.8~ Mainland Chinese and Taiwanese Perceptions of Japan The press in the PRC had long criticized postwar Japanese foreign policy, primarily in terms of the U.S.-Japan collusion (based on the Security Treaty) containing the PRC, Japanese crimes during World War 11, and the emergence of militarism in domestic politics. It had condemned Japan's policy toward the PRC until the Sino-Japanese normalization was achieved. The number of articles criticizing Japan in People's Daily, however, diminished substantially after 1971. During the period from Nixon's announcement of the Sino-American accommodation, to the Sino-Japanese normalization, the opinions of the mainland Chinese press were not quite consistent: while condemning Japan's decision to co-sponsor Taiwan in the U.N. and the reemergence of militarism, it sometimes stated approving depiction of the Japanese. During the period from late 1970 to early 1971, the Chinese press began to distinguish between Japan's endogenous military expansion and the U.S.-Japan Security Treaty, and stopped warning of Japan's prospective militarism based on the latter. The Chinese apparently believed that continuing to criticize the U.S.-Japan alliance would create obstacles to normalizing relations with Japan.X4 While maintaining its criticisms of the domestic trend of Japan's growing militarism, the press stopped depicting Japan as a country which depended substantially upon the U.S. security umbrella for protection.

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This contrasted sharply with the period of Sato's leadership, when the Chinese characterized Japan simply as a reactionary nation. Even if the reversion of Okinawa reduced U.S. troops and removed nuclear weapons from the island, the continued U.S. provision of security made PRC leaders condemn the Japanese government in 1969. After the PRC government made the decision to pursue rapprochement with the U.S. in early 1971, the press became less critical of the U.S.-Japan alliance, and looked forward to a new prime minister, who would be more sympathetic with the PRC than Taiwan. After Tanaka took office, the Chinese government did not demand the abolition of the U.S.-Japan Security Treaty as a condition to normalize relations with Japan. When I
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later, Foreign Minister Ohira emphasized that "It is the Japanese government that will be responsible for normalizing its relations with the PRC, and Shiina's statement in Taiwan only indicated his [personal] protocol." Given the fact that the Japanese government had recognized Taiwan as the legitimate Chinese government since 1952, it was difficult for Premier Tanaka to accept all of Zhou's three principles for normalization. The issue would be discussed between the PRC and the Japanese governments in the final stage of the normalization, and the Tanaka cabinet would ultimately end relations with Taiwan. Tanaka's Visit to Beijing and Sino-Japanese Normalization There were, however, a few points which the Japanese government could not accept in the text of the "Takeiri memo." Premier Tanaka dispatched an official delegation of the LDP to Beijing before his own visit, and indicated the problematic areas of the original plan for the Japanese government. The final resolution was not reached until Tanaka visited Beijing. There were four main points of contention for the Japanese. The first was the expression referring to the termination of the state of war between the two states. The Japanese government maintained that the peace treaty with the Republic of China (Taiwan) had been legally concluded in 1952, and that it was impossible to restate a termination of war with the PRC. In Beijing, the Chinese and the Japanese governments agreed to the use of the phrase "the abnormal state of affairs" in the first paragraph, placing the sentence that read, "the realization of the aspiration of the two peoples for the termination of the state of war" in the preambular paragraph. The second point of contention was the statement in the "Takeiri memo" that "the Japanese government fully understands the three principles put forward by the People's Republic of China." The particular problem for the Japanese government here was to acknowledge the third of the principles, saying that "the so-called Japan-Taiwan Peace Treaty is illegal, void, and should be denounced." The Japanese Foreign Ministry argued that the Japanese government could not accept the illegality of the peace treaty with the Republic of China, and the negotiation faced an impasse. The issue was resolved by adding the phrase that "The Government of Japan . . . maintains its stand under Article 8 of the Potsdam Proclamation," stating Japan's renunciation of any claims to Taiwan which it had occupied until the end of World War 11. The phrase enabled the Japanese government to maintain the legality of the Japan-Taiwan Peace Treaty after Japan's renunciation of Taiwan, while at the same time recognizing that Taiwan was "an inalienable part of the territory of the People's Republic of China. "90 There were two other points which attracted the attention of the Japanese. First, the Japanese government sought to eliminate the reference to China's "right" to demand war reparations from Japan, because the peace

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treaty with Taiwan already renounced the "right" to war reparations. A compromise was reached here also, as the final text announced that "[the PRC government] renounces its demand for war reparation from Japan" in the fifth paragraph. Second, the Japanese were opposed to the statement that "both parties state that neither Chiila nor Japan should seek hegemony in the Asia-Pacific region," suggested in the "Takeiri memo," because they did not consider it to be a legally solid concept. However, the Japanese government accepted it as a quid pro quo for their gains, and assumed that the term "hegemony" was not directed against any third country. The Japanese negotiators in the Foreign Ministry did not foresee the difficulties of the hegemony clause that would emerge in a few years. As documented in the next chapter, the PRC government was referring to the Soviet threat when it added the phrase to the communique. Regarding the relationship with Taiwan, although Shiina warned that the normalization with the PRC must be conducted with attention given to potential Taiwanese reactions, Premier Tanaka and Foreign Minister Ohira had no hesitation in abolishing diplomatic relations with Taiwan. Shiina recounts that neither Tanaka nor Ohira understood the advice he gave them about Japan's relations with Taiwan. His consequent dissatisfaction with the two affected his decision not to recommend Ohira as the prime minister after Tanaka resigned in 1374.9' According to Japanese Ambassador to the U.S. Ushiba's memoirs, the Nixon administration thought that Tanaka would come back to Japan without PRC-Japanese diplomatic relations normalized. The Administration was not pleased with the prospect of Japanese hasty resumption of relations with the PRC.92 At the Ohira-Nixon meeting held in the next month, President Nixon asked whether the Chinese leaders gave the Japanese any difficulties over the U.S.-Japan Security Treaty. Though Foreign Minister Ohira replied, "not at a11,"93 the President remained concerned about Japan's sudden overtures toward the PRC. Altl~ougl~ the Japanese government resumed diplomatic relations with the PRC without damaging its relationship with the United States, the U.S. government continued to worry about the status of Taiwan.

This chapter has examined a significant postwar step towards an independent Japanese foreign policy: the normalization of relations with the PRC. While having no alternatives but to yield to American demands on economic issues, Japanese leaders sought greater autonomy from the United States in its foreign policy toward China. Compared with the Sino-Soviet dispute, which stemmed from differences over ideological interpretations of socialism, there were not essential reasons for China and Japan to abhor each other. Although Japan's war crimes could be an obstacle against nor-

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Sino-Japanese Normalization End of American "Romantic Triangle" 101 malization, the fact that the Chinese feared the Soviet Union and the Japanese had questioned their relations with the United States made the diplomatic resumption possible. In terms of the triangular formation of China, the U.S., and Japan, the sudden change in the Sino-American relationship quickly transformed the bilateral relations between China and Japan from enmity to amity.94 U.S. leverage over Japan during the fall of 1971 stemmed from the estranged relationship between China and Japan. Given the fact that Premier Sato gave priority to the ratification of the U.S. reversion of Okinawa in the Senate, the Chinese condemned Japan's condescending attitude toward the United States. Mutual enmity in Sino-Japanese relations affected the U.S.-Japan relationship, which allowed the U.S. government to maintain greater flexibility in its negotiations with Japan over trade, economic policies, and policies toward China. Japan's sudden efforts to remedy the estranged relationship with the PRC can be traced to two motives. First, since Japanese leaders did not expect that the U.S.-Japan partnership would be altered from the then-present U.S.-Japan "Stable Marriage," the first "Nixon Shock" threatened Japanese leaders with the prospects of a "Stable Marriage" between the U.S. and the PRC. In the face of fear of abandonment from the security relationship with the United States, Japanese officials tried to find out what U.S. and Chinese leaders had discussed regarding the U.S.-Japan security relationship, and whether the PRC would replace Japan as a stabilizing force in East Asia. Second, feeling betrayed by the U.S. government, Japanese leaders found a need to pursue a foreign policy more autonomous from the United States. Specifically, since the policymakers had thought Sino-Japanese normalization to be one of the most vital issues during the postwar era in terms of Japan's access to the Chinese market, Nixon's announcement of the Sino-U.S. rapprochement prodded Japan to contact the Chinese government. They had actually wished to resume diplomatic relations with the PRC earlier than the United States. As far as the U.S. decision-making process was concerned, the NixonI
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riage." In response to Japan's approach to the PRC, the Nixon administration indicated some uneasiness and irritation toward Japan. Specifically, it wondered, during the Sino-Japanese resumption process, whether Japanese leaders would agree with PRC officials on excluding the clause o n protecting Taiwan from the 1969 U.S.-Japan Joint Communiquk, in which Nixon and Sato agreed on a need to protect the "Far East" after the U.S. government returned Okinawa. In the event of a future rupture in U.S.-PRC relations, the U.S. government continued to be interested in keeping Taiwan as an important outpost. Moreover, after Tanaka became Prime Minister in July, 1972, his pledge of normalizing Sino-Japanese relations worried U.S. officials, who feared the terms of the normalization. Their concern regarding Taiwan continued until Nixon and Tanaka discussed the Japanese government's normalization with the Chinese at the Hawaii summit in August-September, 1972. From July, 1971, to September, 1972, the triangular formation between China, the United States, and Japan shifted from a "Romantic Triangle," in which the United States was the "pivot" and the other actors were U.S. "wings," to a "Me'nage a trois" in which the three states had positive relationships with each other. During the process of the transition, Japanese leaders were concerned about the possibility of a Sino-American "Stable Marriage," while the Nixon administration feared that Japan's hasty overture toward the PRC would lead to a Sino-Japanese "Stable Marriage," in which the protection of Taiwan would be eliminated from the former U.S.Japan agreement. Although both fears proved to be groundless, the emergence of regional multipolarity in East Asia nevertheless had begun dramatically to shift the terms of the relationship between the United States and Japan.

NOTES 'Foreign Broadcast Information Service (FBIS) during 1969-71 often employed this term to criticize the Sato cabinet's emphasis on the U.S.-Japan parti~ership. Xyodo, July 11, 1971, in FBIS, July 11, 1971. 31Cyodo,July 16, 1971, in FBIS, July 16, 1971. 4Sadalto Ogata, Norrzalization with China: A Comparative Study of U S . and Japanese Processes (Berkeley:Institute of East Asian Studies, University of California, 19881, p. 37. jXkira Okada, Aru Gaiko-kan no Shogen: Mizztdori Gaiko Hiwa (Testimony of a Diplomat), (Tokyo: Chuo I
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X e n r o Nagoshi, Kurenulrin Hin~itszl-bunshowa Kataru (Secret Docunmzts in the Krenzlin) (Tokyo: Chuo IZoron Publishel; 19941, p. 145. Translation by the author. The book also documents that the Soviet goYernment often provided the JSP with financial support for elections and other party activities. 1OSadalzo Ogata, "The Business Community and Japanese Foreign Policy," Robert A. Scalapino(ed.), The Foreign Policy of Modern Japan (Berkeley and Los Angels: University of California Press, 1977), pp. 175-203. IIMarshall Green, John H. Holdridge, and William N. Stokes, War and Peace with China: First-hand Experiences in the Foreign Service of the United States (Eethesda: DXCOR Press, 19941, p. 124. 12Richard H. Solomon, Chinese Political Negotiating Behaviol; 1967-1 984 (Santa Monica: RAND Corporation, 1995), p. 120. lTelzing NCNA, August 4, 1971, in FBIS, August 4, 1971 IWgata, Nonnalization with China, pp. 41-42. ljIZusano, "Two Nixon Shocks," pp. 14-16. 16PPeing NCNX, September 25, 1971, in FBIS, September 27, 1971. 1'Memorandum of Conversation, The President, Alexander Haig, and Nobusulze IZishi, The Oval Office, October 22, 1971; National Security Archive, Washington, DC. IsAfter Nixon was defeated in the 1960 presidential election, IZishi often introduced him Japanese political leaders and company executi~es,and enabled Nixon to maintain his prestige as a major political figure. Given the relationship, Nixon had sympathy for IZishi, respecting his opinions on Japanese political situations. IgOgata, Norn?alization with China, p. 43. 20Pelzing, NCNA, November 17, 1971, in FBIS, November 17, 1971. 21Marshall Green, et.al., War and Peace with China, p. 95. '?National Security Study Memorandum (NSSM) 141, "Implications for U.S. Policy of the Participation of the People's Republic of China in Multilateral Diplomacy," November 12, 1972. 2"emorandum of Conversation (by IZissinger), Roclzefeller Center, November 17, 1971; White House Special Files, Staff Member and Office Files, A1 Haig, Box 44 (General Speech File); National Archives, College Park, MD. '4I<usano, "Two Nixon Shocks," pp. 28-29. 'jMineo Nakajiina, "Hori-shokan wa Watashi ga IZaita (It is I that wrote the Hori letter)," Bungei Shunju, October 1982, pp. 147-50. 26Y~ilzioBesshi, "Sengo Nicchuu IZanlzi to Hi-lzoshilzi Sessholzu-sha," Kokusai Seiji (International Relations), Vo1.75 (1983),p. 109. Translation by the author. 2'Ogata, Nonnalization with China, p. 44. '8Underlined by the author to contrast the difference. 'gChaliners Johnson lucidly argues that the Sato cabinet, while placing its priority on Japan's relations with the U.S., sought to cultivate ties with the PRC before receiving the "Nixon Shoclzs." He documents the fact that Sato's private policy group, called kokusai kankei kondankai (the international relations study group), often discussed the ways Sino-Japanese relations could he resumed, and that the "Hori Letter" exemplifies Sato's seriousness toward the PRC. Chalmers Johnson, Japan: W h o Governs? (New York: Norton, 1995), pp. 245-46. However, attention should be paid to the fact that the first meeting of the study group was held on August 26, 1971. That is, although Sato thought it important to cultivate ties with the PRC, his priority was on Japan's relations with the U.S., and it was U.S.-Japan relaCopyright 2003 by Taylor & Francis Books, Inc.

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tionship that dominated Japan's China policy. The mainstream of the Foreign Ministry had been rather reluctant to advise Premier Sato to m o x ahead toward resuming diplomatic relations with the PRC. As documented later, it was the IZomeito (the Clean Government party) that encouraged the Japanese government to normalize relations with China, because Chinese leaders relied on the party as the most authentic intermediary between the two governments. "Department of State Bdletin, Vo1.66, No.1707 (March 1972), p. 343. 3IInterview with Marshall Green, March 18, 1996, Washington, D C 3'Memo from Jon M. Huntsman to Henry A. IZissingel; "PRC Trip," September 23, 1971; White House Special Files, Staff Member and Office Files, Staff Secretary, Box 85 (President's Memos for Icissinger); National Archives, College Park, MD. "Memo from Bruce IZehrli to Henry Kissinger, "China," January 31, 1972; White House Special Files, Staff Member and Office Files, Staff Secretary, Box 85 (President's Memos for IZissinger); National Archives, College Park, MD. 34Memo from Icissinger to the President, "AEC 'Today' Show Has Sato 'Disinviting' You to Japan," October 16, 1971; White House Special Files, White House Central Files, Confidential Files, Box 65; National Archives, College Park, MD. Underlined in the original. 35111 late 1971, IZissinger stated that the Nixon administration had two major reasons why it did not make an a d ~ a n c enotice. First, the Nixon administration considered Taiwan. Although Japan was the most important security partner for successive U.S. administrations, Taiwanese leaders had eYen greater fear over the change in U.S. China policy. IZissinger stated at an off-the record business meeting that "there was the problem of notifying the Taiwanese; the problem of uncertainty about the trip itself. . . The trip was a shock to the Japanese but that's not the question." From this perspective, the Nixon administration had no reason even strategically for putting more emphasis on the Japanese than on the Taiwanese, who the Administration imagined would have an extreme fear of abandonment from the allied relationship. The second reason was that Kissinger disliked the Japanese tendency not to be able to keep secrets. At the same meeting, he stated, "the Japanese have the only government in the world which is leakier than ours. It is simply impossible to deal with the Japanese and avoid leaks. In Septembel; when Secretary Rogers went to Japan for a ministerial meeting, he sent an advance copy of a speech . . . The speech should h a x been classified "secret," . . . [but] within 2 4 hours of the time . . . it was printed verbatim in the Japanese press." Memorandum of Conversation (by IZissinger), Cincinnati Country Club, November 17, 1971; White House Special Files, Staff Member and Office Files, A1 Haig, Box 44 (General Speech File); National Archives, College Park, MD. A similar statement can he seen in Premier Sato's diaries. It says on August 25, 1971 that "IZissinger wants to talk to the Japanese governlnent if it can preserve secret. He, however, said that the established Japanese bureaucracy cannot d o that." Eisaltu Sato, Sato Eisaku N i k k i (The Diaries of Eisaku Sato), Volume 4 (Tokyo: Asahi Shimbun, 1997), p. 405. Translation by the authoc Also, Icissinger once stated regarding his overall image of the Japanese that "[i]ndividually their leaders are not very impressi~e,hut the totality of the society is incredibly impressive." Memorandum of Conversation (by Icissinger), Rockefeller Center; November 17, 1971 (fn. 23). "Memorandum of Conversation, The President, Alexander Haig, and Nobusulte Icishi, October 22, 1971 (fn. 17). Copyright 2003 by Taylor & Francis Books, Inc.

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37Joji Watanulzi, "Nihon-;in no IColzusai-shalzai-lzan (Contemporary Japanese Perceptions of International Society)," Institute of International Relations, Sophia University, Research Papers Series A-13, A-19, August 1972, Tokyo, Japan, pp. 9-10. j8Memo from the President's File, "China and Internal Politics in Japan," September 10, 1971; National Security Archive, Washington, DC. 39Ibid. At the Nixon-ICishi meeting in October 1971, the President stated again that "in any relations with Peking, [I have] in [my] mind the paramount importance of our friendship and close association with Japan." Memorandum of Conrersation, The President, Alexander Haig, and Nobusuke ICishi, October 22, 1971 (fn. 17). 40Xfter meeting wth Fulzuda, Premier Sato wrote in his diary that "negotiations started between the U.S. and the PRC, and we should watch how they will go. We agree with the U.S. in moring ahead toward ameriolating relations with China, but should inform them that we are very cautious about co-sponsoring Taiwan's seat in the United Nations." Sato, Sato Eisakzt Nikki, Volume 4, p. 42.3. Translation by the author. 41Memofrom Henry A. ICissinger to the President's Files, "Your Meeting with Senator James Buclzley of New Yorlz," February 14, 1972; White House Special Files, President's Office Files, Eox 87; National Archives, College Park, MD. 4?Nixon's Handwritten Personal Notes regarding U.S.-China Visit, February 15, 1972; White House Special Files, President's Personal Files, NameISubject Files, Box 7; National Archives, College Park, MD. 4"inoru IZusuda, Sato Seiken 2797 nichi (2797 Da)'s of the Sato Cabinet), Vo1.2 (Tokyo: Gyosei Mondai IZenlzyusho, 19831, pp. 313-19. 4 W e m o from James J. Wickel for the President's File, "Meeting with Eisaku Sato, Japanese Prime Minister," January 6, 1972, 1:30pin, Sail Clemente, California; White House Special Files, President's Office Files, Eox 87; National Archives, College Park, MD. Discussions between the U.S. and the Japanese governments at the San Clemente meeting were conducted three times: (1)from 1:30 p.m. on January 6, ( 2 ) from 9:30 a.m. on January 7, and ( 3 ) from 11 a.m. on January 7. I will call the three declassified documents respectirely "San Clemente Document No.1, No.2, and No.3." The first two meetings were attended by President Nixon and ICissinger from the U.S., Premier Sato and Ainhassador to the U.S. Nobuhiko Ushiba from Japan, while the third meeting included Secretary of State Rogers and Foreign Minister Fulzuda, in order to discuss the date of returning Olzinawa to Japan. 4jSan Clemente Document, No. 1. 46San Clemente Document, No.1. Nixon's statement was also noted in Ushiba's memoir. Nohuhiko Ushiba, Watashi no Rirekisho: Gaiko no Shztnkan (My Personal Histor)') (Tokyo: Nihon IZeizai Shimbun-sha, 1984), p. 144. 47San Clemente Document, No. 1. 4%an Clemente Document, No.2. 49iVeu~York Times, January 11, 1972, cited in IZusano, "Two Nixon Shocks," p. 35. 'OMemo from Tom C. IZorologos for the President's Files, "Memorandum of Conversation on the President's Meeting with Senator Buclzle!;" February 14, 1972; White House Special Files, President's Office Files, Box 87; National Xrchives, College Park, MD. Copyright 2003 by Taylor & Francis Books, Inc.

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jlMarshal1 Green, et.al., War and Peace with China, pp. 166-68. j2Memorandum of Comersation (by ICissinger), Rockefeller Center; November 17, 1971 (fn. 23). jjWasuke Miyake, Gaiko ni Shori wa Nai (There is N o Victory in Diplomacy) (Tolzyo: Solzeisha, 199 11, pp. 137-38. j X e i Walzaizumi, Tasaku Nakarishi w o Shinzemll to Hossu (The Best Course Available), (Tolzyo: Bungei Shunju Publisl~er,19941, chap. 4. Although Walzaizumi's book addresses the 1967 Sato-Johnson meeting, Nixon took over winning Japan's support for the U.S. accomplishment of an "honorable retreat" as a condition of the U.S. return of Okinawa. jjMemo from Henry A. Kissinger to the President's File, "The President's Private Meeting with British Prime Minister Edward Heath," December 20, 1971; National Security Archive, Washington, DC. Thomas J. McCormiclz also argues that U.S. invol~ementin Vietnam stemmed not from the simple a d ~ o c a c yof anti-Communism or humanitarianism but rather from the U.S. Cold War o h j e c t i ~ eof guaranteeing natural resources and other economic interests for Japan as the most significant stabilizing force in East Asia. From this perspective, the Japanese government's pursuit of approaching North Vietnam was particularly annoying for the U.S. government. Thomas J. McCormiclz, America's Half Centztrj': United States Foreign Policy in the Cold War, Second Edition (Baltimore: Johns Hopkins Press, 1995), chap. 6. j6For instance, Tad Szulc, The Illztsion of Peace: Foreign Policy in the Nixon Years (New Yorlz: The Vilzing Press, 19781, p. 458. j7Raymond L. Garthoff, Ditente and Confi.ontation: American-Soviet Relations f i . 0 ~Nixon ~ to Reagan, Revised Edition (Washington, DC: The Broolzings Institution, 1994), p. 288. j q a k e o Fukuda, Kaiko 9 0 nen (Recalling Ninety Years) (Tokyo: Iwanami Shoten, 199.51, pp. 20.3-06. I11 this memoir, Fukuda recalls, in his opinion at the time, that the Japanese government should not have moved quiclzly toward resuming diplomatic relations with the PRC until problems over the Sino-Soviet split and PRC-Taiwan relations were resolved to the satisfaction of the Japanese. jyOgata, Normalization with China, p. 46. 6OII(unio Yanagida, Nihon wa Moeteirztka (Is Japan Bztming?), (Tokyo: IZodansha Publishing Company, 198.31, p. 266. Translation by the author. "Shigezo Hayasalza, Ha)'asaka Shigezo no "Tanaka Kakuei" Kaisoroku (Shigezo Ha)'asaka's Memoir on Tanaka Kakuei) (Tolzyo: Shogalzu-lzan, 19871, pp. 220-24. Yoshilzatsu Talzeiri, Secretary General of the IZomeito at that time, stated that Tanaka ~ i e w e dthe U.S. as significant for Japan, hut not as much as Premier Sato had thought. I n t e r ~ i e wwith Yoshikatsu Takeiri, August 23, 1995; Tokyo, Japan. Q'Memo from Bruce Kehrli to Henry IZissinger, "Japan," July 20, 1972; White House Special Files, Staff Member and Office Files, Staff Secretar!; Box 85 (President's Memos for IZissinger); National Archives, College Park, MD. 63Robert S. Ross, Negotiating Cooperation: The United States and China, 1969-1989 (Stanford: Stanford Uni~ersity Press, 199.51, pp. 46-50; IZissingel; White Hoztse Years, p. 1075. In the negotiation, Zhou also stated to Nixon that "I advised Chiang Kai-shelz not to withdraw from Quemoy and Matsu. We advised him not to withdraw by firing artillery shells at them . . . So, they understood our

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intentions and didn't withdraw.'' Solomon, Chinese Political Negotiating Behavior, p. 19. 640gata, Normalization with China, pp. 33-34. 6jPztblic Papers of the Presidents of the United States: Richard Nixon, 1969 (Washington, DC: United States Government Printing Office, 1971), p. 955. 66At the State Department, some officials described about the autonomous aspect of Japanese policy after the "Nixon Shoclzs," that "as its recovery proceeded, it was certain that Japan would play a more autonomous role in world affairs. In retrospect, the last decades will be seen as a transitional period in which Japan, while relying on U.S. economic support and military protection, reestablished its inner cohesion as a societ!; and defined a more independent national role for itself." Department of State Bulletin, Vo1.66, No.1707 (March, 1972), pp. 340-41, cited in I<usano, "Two Nixon Shoclzs," p. 39. 6'Inter~iew with Marshall Green, March 18, 1996, Washington, DC. H e recalled in his recent book that "Nixon seemed surer than the rest of us that Tanaka and Zhou would act responsibly" and that "we should not press the Japanese on this issue at our forthcoming meeting in Hawaii." Marshall Green, et.al., War and Peace with China, p. 173. 6 W e m o from Tom C. I
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between the PRC and Japan has not been clearly documented, so this anecdote pro\.ides a clue t o understanding the reason. According to Prof. Royama, he heard the story from Tang Jia-xuan, present Vice Foreign Minister, who had been a staff interpreter at the China-Japan Friendship Association in Beijing in 1972. 'Qgata, Norrzalization with China, p. 48. Interview with Yoshilzatsu Talzeiri, August 23, 1995; Tolzyo, Japan. '9Asahi Shimbun, July 3, 1971. "Nihon Hoso Kyokai, Shuonrai no Ketsudan (Zhou EnlaiS Decision), (Tokyo: NHK, 1994), pp. 8 1-81. 81The Report of the Koineito's Second Delegation to the PRC, Ano Yo no Shusori (Premier Zhou at That Night), unpublished document. "The main points of the original "Talzeiri memo" follows. Out of the 8 items Zhou indicated, the Japanese government had difficulty accepting the following four as they were. See Ogata, Nornzalization with China, p. 49; Nobutoshi Nagano, Tenno to Toshohei no Akushzt (The Shaking of Hands between the Emperor and Deng Xiaoping) (Tokyo: Gyoseiinondai Kenkyu-sho, 1983), pp. 29-32. Also, all portions of the "Talzeiri memo" have been declassified in early 2002. (http://avatoli.ioc.u-tolzyo.ac.jp/-worldjpn/, accessed June 20, 2002). (1)The state of war between the People's Republic of China and Japan is terminated on the day this statement becomes public. ( 2 ) The Japanese goyernment fully understands the three principles put forward by the People's Republic of China, and recognizes the People's Republic of China as the sole legal Government of China. Based on this, both governments will establish diplomatic relations and exchange ambassadors. (5) Both parties state that neither China nor Japan should seek hegemony in the Asia-Pacific region, and that both parties are opposed to efforts by any other country or group of countries to establish such hegemony. ( 7 ) The G o ~ e r n m e n tof the People's Republic of China renounces its right to demand war reparation from Japan in the interest of the friendship between the Chinese and the Japanese peoples. "I~nterview with Talzeiri, August 23, 1995; Tolzyo, Japan. Harry Harding argues that Chinese cooperative relationships can he diyided into three groups: links with wealthier and more powerful benefactors, strategic and economic ties to smaller and weaker clients, and more equal hut less intense relationships with a large nuinber of foreign partners. Faced with fear of encirclement, Chinese leaders sought to have their clients together by utilizing China's traditional identity as a leader of the third world. The strategy came to be downplayed, however, as they succeeded in accommodating their relations with the United States and Japan as their benefactors. See Harry Harding, "China's Co-operatiye Eehayiour," Thomas W. Robinson and Dayid Shainhaugh (eds.), Chinese Foreign Policy: Theory and Practice (New Yorlz: Oxford University Press, 1994), pp. 375-400. "Tatsumi Olzabe, Chugoku no Tai-nichi Seisaku (Chinese Polic)' toward Japan) (Tolzyo: Tolzyo University Press, 19761, pp. 84-85. Moreover, Besshi Yulzio, "Beichu Sekkin-ka no Nicchu Kankei (Sino-Japanese Relations during the time of the Sino-American Accommodation)," Shigeaki Uno and Satoshi Ainako (eds.), 20 seiki no Chztgoku: Seiji Hendo to Kokztsai Hendo (China in the Twentieth Century: Political Change and International Stimllus) (Tolzyo: University of Tolzyo Press, 1994), p. 251-57.

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8jBesshi Yulzio, "Beichu Selzlzin-lza no Nicchu I
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CHAPTER SIX

JAPAN'S PURSUIT O F INDEPENDENCE I N FOREIGN POLICY: A N E W RESPONSE T O T H E "ALLIANCE DILEMMA"

THENEWU.S. GLOBAL POLICY AND JAPAN'S FEAROF ENTRAPMENT Japan's Entry into the Balance of Power Game During the process of diplomatic normalization with the PRC, the largest concern for the Tanaka cabinet was whether Chinese leaders would accept Japan's maintenance of the security relationship with the United States. Compared with this issue, the Japanese government worried little about the impact on the Soviets of Sino-Japanese normalization. In the PRC-Japan negotiations in September, 1972, the Japanese government conceded on inclusion of the term "hegemony" in the communique, as a quid pro quo for other concessions the PRC government had made.' In reality, however, the "hegemony" clause pushed Japan into a strategic balance-of-power game in East Asia that the Japanese government had never experienced in postwar history. As the Nixon administration succeeded in achieving detente with the Soviet Union by making use of the accommodated relationship with the PRC, Premier Sato, in his January, 1972, policy speech, stated his readiness to negotiate a peace treaty with the Soviet Union. He sought to utilize Japan's prospective accommodation with the Soviets as a source of leverage in attaining normalization with the PRC. After achieving normalization with the PRC, Premier Tanaka attempted to use normalization with China as leverage to accelerate negotiations with the Soviet Union.2 As time went by, however, the Japanese government became increasingly cautious over being dragged into confrontations between the two communist powers. From the Chinese perspective, the establishment of PRC-Japan diplomatic relations was meant to demonstrate that the Chinese "consider[ed] Japan clearly an incipient ally along with [the U.S.] to counter the Soviet and the Indian [threat]." 3 At a reception of the Japan-China Friendship Association in October, Mao Zedong said, "[many people] from various cir-

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cles and social strata . . . overcame difficulties, removed obstacles, worked untiringly and made important contributions to promoting Japan-China friendship and the restoration of diplomatic relations between the two countries."4 Concerned about anticipated Japanese militarism, Zhou emphasized that the established U.S.-Japan security treaty would function as a brake on Japanese expansionism. Given the successful establishment of governmental ties with both Washington and Tokyo, Beijing achieved its goal of strengthening itself against the increasing Soviet threat. From the U.S. perspective, the Sino-Japanese normalization, and the establishment of a strong relationship among China, the U.S., and Japan, would enable the Nixon administration to have greater flexibility in its negotiations with the Soviet Union. To attain this goal, the U.S. government thought that the U.S.-Japan Security Treaty should remain intact. While President Nixon wondered whether Japan's new relationship with the PRC might alter the established U.S.-Japan alliance, Japanese Foreign Minister Masayoshi Ohira said to him, during his visit to Washington in October, 1971, "The Chinese indicated the Security Treaty is a matter between Japan and the United States, and they understood that Japan feels that it needs the Security Treaty."' The U.S.-Japan security relationship now became more than a means of attaining the goals of containment of the Soviet Union; it also would now reassure China and the rest of Asia that Japan would forego military expansion. Finally, from the Soviet perspective, China's new relationships with the U.S. and Japan were nothing but a new threat to Soviet security. In the early 1970's, facing the ideological split with the Chinese, the Soviets sought to lure neighboring countries into the "Asian Collective Security Scheme." Just after the border clash at the Damansky/Zhenbao in March, 1969, Brezhnev announced that "the time will come soon when we have to consider establishment of a collective security institution in Asia, like in Europe." The scheme in reality sought to motivate other states into joining a collusion with the Soviet Union, and to strengthen the Soviet Union's position against the PRC. Likewise, the Chinese argued for the importance of pursuing an "anti-hegemony" policy against the Soviet Union, and the use of the term in the coinmuniquC of the Sino-Japanese normalization, although not directed against a third party, implied the PRC's intention of opposing the Soviet Union.6 After the Washington meeting, Foreign Minister Ohira visited Moscow where he faced criticism from Gromyko, who claimed that the sixth and the seventh paragraphs of the Sino-Japanese joint communiquC signified the formation of a defense alliance between Japan and China against the Soviet Union.' Ohira claimed that the communique said that "the normalization . . . is not directed against any third country," but no understanding was reached with the Soviet Union on the interpretation of "hegemony." Ohira, however, succeeded in reaching an agreement to start negotiations on a peace treaty with the Soviets. For the Japanese government, Copyright 2003 by Taylor & Francis Books, Inc.

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which normalized relations with the Soviet Union in 1955, concluding the Soviet-Japanese peace treaty, along with normalizing Sino-Japanese relations, had been a major foreign policy objective. After a series of diplomatic exchanges, Premier Tanaka visited Moscow October 7-10, 1973, and issued a joint coinmuniquC with Brezhnev stating the two countries' readiness to examine ways to expand cooperation in trade, fishery, agriculture, science, and the development of Siberia. The Soviets also proclaimed their readiness to discuss the northern territory issues, which had plagued relations between the two countries since the end of World War 11. They suggested that the Japanese government join the establishment of the "Asian Collective Security Scheme." Given the fact that Japan put more emphasis on the resolution of territorial problems than on any other issue, Ohira rejected the "Security Scheme."8 The issues of "anti-hegemony" and the "Asian Collective Security Scheme" brought to mind for the Japanese government the contentious nature of the Sino-Soviet split. With Sino-Japanese relations normalized, the Japanese government was pushed into a multipolar balance-of-power game. The Nixon administration succeeded in including the PRC in the American policy of containment against the Soviets, while simultaneously seeking detente with the Soviet Union in 1972 via the SALT I Agreements. The SALT I Agreements prohibited both sides from deploying Anti-Ballistic Missile (ABM) systems, except at two sites each containing no more than 100 interceptor missiles.9 Althougl~detente in Europe was seemingly unrelated to East Asian security, the Chinese continued to fear that detente between the West and the USSR would enable the Soviet Union to move the bulk of its forces from Europe to the Soviet-Chinese border. Implications of Detente in Europe for East Asian Security From the Chinese perspective, Nixon's visit to Beijing strengthened their forces against the anticipated Soviet threat. The Sino-American rapprochement, however, only meant that negotiations between the two states were beginning. In February, 1973, when I
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some form of representation on Taiwan.' Zhou said to I
'

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With Sino-Soviet relations deadlocked, the basic framework of triangular diplomacy was now completely established. During his visit to Moscow in May, 1973, Brezhnev emphasized the threat posed by the Chinese, suggesting to I
As seen in the statement, while maintaining a friendly relationship, the "Year of Europe" was designed to encourage a sharing of U.S. burdens and

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responsibilities with its allies. That proposal was anything but new, given the fact that the Nixon administration's priority was to reassess the extent to which the U.S. government would provide its allies with security and economic guarantees. Therefore, the incipient reaction of European countries to the "Year of Europe" was quite tepid.23 Leaders in Europe argued that the U.S. intended to exercise an "issue linkage" strategy, demanding economic concessions from American allies in exchange for continued U.S. provision of security. They were afraid that, after achieving relaxation of tensions with the two communist adversaries, the U.S. government would perceive greater leverage in trade and other economic issues. French President Pompidou openly criticized the U.S.-Soviet detente as collusion, and decided to conduct a nuclear test in June, 1973. In effect, Kissinger argued in a White House memorandum that "in economics, we have the problem that our key difficulties are with the European Community, and the French may be highly reluctant to begin a US-EC dialogue . . . [The Year of Europe project] will require careful cultivating and handling, firm White House control and total bureaucratic discipline to prevent it from falling into a meaningless set of generalities. "24 The Europeans, however, gradually adjusted their interests to mesh with the "Year of Europe," because they thought that it would be difficult to guarantee their security without American armed forces in Europe. At the September, 1973, foreign ministers' meeting of the EC, they agreed to affirm a need for cooperation with the United States in both security and economic policies, even after the Soviet threat diminished. The Japanese attitude toward the American "Year of Europe" was at first more positive than the Europeans. As former Premier Sato stated in his private meeting with Nixon in January, 1973, "Tanaka made a special plea that he would carry out the promises given to you at [Hawaii] about reducing the Japanese trade imbalance with the U.S."2j Given its glaring military weakness, the Japanese government had no alternative but to endorse the need for cooperation with the United States. The U.S.-Japan economic negotiations, however, did not resolve economic and monetary frictions as satisfactorily as the U.S. government had expected. The next section considers how the two states addressed the adjustment of economic issues after the December, 1971, Smithsonian Conference.

THEINTRODUCTION OF THE FLOAT AND U.S.-JAPAN ECONOMIC NEGOTIAT~ONS AFTER SMITHSONIAN Kissinger's primary objective in the "Year of Europe" policy was to bring economic powers in the Western bloc together under U.S. control, and to encourage the allies to share defense and economic burdens. The policy stemmed from diminishing U.S. economic competitiveness, an increase in trade deficits, and a reduction in the value of the dollar. Even after the new

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exchange rate was determined at the Smithsonian Conference, both the U.S. and the Japanese governments repeatedly conducted economic negotiations. The U.S. government tended to blame its allies for huge U.S. trade deficits, while the allies continued to attribute their surplus to the decline in U.S. competitiveness. The Japanese government, however, gradually cooperated, although reluctantly, with the U.S. policy initiative. That partial cooperation, however, collapsed when the world oil crisis occurred in October, 1973, which brought Japan into a state of fear over the real possibility of an energy crisis. Japan's Entry into the Floating System The Smithsonian Conference set a new exchange rate which, Japanese leaders believed, appreciated the value of the yen beyond the appropriate equilibrium, threatening to throw the Japanese economy into recession. Japan's trade surplus, however, grew faster than they had expected, (by 1 0 to 20 percent), and the U.S. government continued to demand that the Japan import more American products. As Peter G. Peterson, Advisor to the President in Economic Affairs, stated, "Japanese observers and writers . . . say that good old steady Uncle Sam is increasingly an unreliable, indifferent ally . . . [but] the new economic policy . . . [was] a shock not only to the Japanese but most Americans.26 The new exchange rate did not last. In June, 1972, speculation turned against the British pound. The British government withstood the pressure for only about a week, and decided to float its currency on June 23. It was the first break in the Smithsonian central rates, and provoked more consideration of a joint float on the part of the Europeans against the dollar.2' Regarding U.S.-Japan relations, given the increasing U.S. trade deficits, the Nixon administration increasingly demanded that Japan increase its purchase of American products. At the July, 1972, U.S.-Japan commerce meeting held in Hakone, the U.S. government claimed that the Japanese trade surplus would be about 4 billion dollars in 1972, a half billion dollars larger than the Japanese expected, and asked the Japanese representatives to produce a specific plan for reducing the trade imbalance. The same discussion was repeated at the August Nixon-Tanaka summit in Hawaii, where the Japanese government promised rapid expansion of American imports, including airplanes, uranium, and grain. At the September IMF annual meeting in Washington, President Nixon delivered a speech in which he stated, "As nations around the world gain new economic strength, commercial contact multiplies along with the possibilities of disagreements . . . Now we expect our trading partners to help bring about equal and fair competition."28 New Secretary of the Treasury George Shultz suggested that "disproportionate gains or losses in [foreign] reserves" would be the "most effective single indicator" to guide the adjustment process.29 Implicitly, the plan meant that a surplus country unwilling

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to adjust would eventually lose its right to convert its currency reserves into gold. Given the fact that the unconditional gold-dollar exchange in the Bretton Woods system had always kept the U.S. current account under pressure, the U.S. government sought to find a way to make surplus countries adjust their imbalances by placing a leash on the holding of foreign reserves.30 The Smithsonian Conference determined that governmental purchases should be conducted if the rate rose or fell more than 2.25 percent of the new rate. With the yen set at 308, the Japanese government was supposed to intervene in the market if the rate was below 301.70 yen or above 314.93 yen. In the face of the rush to sell the dollar, the Bank of Japan made every effort in late September to maintain the value at less than the predetermined rate. As a result, Japan's foreign reserves increased tremendously, which undermined the aims of the new U.S. proposal. During that process, the Japanese government looked for ways to adjust the trade imbalances and huge foreign currency holdings. For instance, they outlined a "Seven Point Economic Program" in June, 1972, which included the promotion of imports, orderly-regulated exports, the utilization of foreign exchange holdings, and so forth. The Tanaka cabinet sought legislation which would enable the government to lend foreign currencies to private banks.3' Moreover, the Ministry of Finance, the Ministry of International Trade and Industry (MITI), and the Ministry of Foreign Affairs, seriously discussed the possibility that 30 percent of Japan's total exports would shift from a dollar to a yen basis.32 All the proposals, however, were viewed as inadequate by the U.S. government, which maintained that little had been done to reduce Japan's trade deficits.33 The delay was attributed to Premier Tanaka's need for an upcoming election in late 1972. He feared that accepting the exchange rate realignment would be politically costlypotentially decreasing the number of the LDP in the Diet. In early 1973 when Nixon's second term began, the U.S. government decided to abandon the mandatory price-and-wage controls. Given a delayed monetary policy, the lifting of controls would signal the Administration's indifference to the existing inflationary pressure. Then in late January, a series of unrelated developments created new pressure to shift policy: the Italian lire came under attack; it was announced that the American trade deficits in 1972 amounted to 6.4 billion dollars; West Germany's trade surplus reached 6.3 billion dollars. The dollar was now under serious attack. The currency crisis now emerged as a worldwide phenomenon which would need major powers' negotiations. Faced with the dollar crisis, Under Secretary of the Treasury Paul Volcker wrote a memorandum to Shultz, saying that the U.S. should take the initiative in exchange rate realignment. Specifically, he proposed that the U.S. devalue against gold by 1 0 percent, while the Japanese revalue by 1 0 percent against gold. Volcker secretly flew to Tokyo, Bonn, Rome, and Paris, meeting with the finance ministers of each country, and demanding Copyright 2003 by Taylor & Francis Books, Inc.

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the realignment.34 In the negotiations, the Japanese government agreed not to determine a new exchange rate rigorously, but to float in a range between 257 and 264 yen, although the new rate was supposed to be in the range of 1 7 to 20 percent yen appreciation against the dollar. Even at that stage, the Japanese thought that floating was only a temporary plan, and that there was a strong worldwide consensus for returning to a parity regime. In Europe, however, confusion and turmoil were mounting, and the German mark and the Dutch guilder were under heavy attack. Both Germany and Holland closed their foreign exchange markets on March 2, and when they reopened on March 19, all the major countries were floating their currencies. The fixed excl~angerate agreed to at the December, 1971, Conference, had collapsed in only fourteen montl1s.3~In opposition to tlle U.S. demand on appreciating tlle allies' currency, the Japanese and other European countries adopted the "floating" plan, although the fluctuations in currency market structurally led them to have the choice. Introducing the float decision, the Japanese government also opposed to the high-handed U.S. approach to the yen appreciation. In later days, Finance Minister Aichi recounted, "The decision to float was better than a new exchange rate, because the gradual appreciation of the yen enabled Japanese companies to be ready for the change in the exchange rate."36 In tlle case of currency diplomacy, it was tecl~nicallypossible to war off tlle U.S. demand by transferring tlle political negotiations to tlle structural adjustment based on "the supply and demand mechanism" of economies. The Japanese government succeeded in allaying the uneasiness of the business community which would have stemmed from the sudden change in the exchange rate. Trade Issues and President Nixon's State of the Union Address in 1973 The U.S. government proposed the currency realignment because of the increasing U.S. trade deficit. Although no specific trade friction occurred after the two states had resolved the textile issue in October, 1971, some U.S. officials felt without explicitly that "[as the] US-Japan trade negotiations are continuing . . . [we need] a willingness to attempt to agree to a format for resolution."3' In June, 1972, President Nixon expressed satisfaction with his New Economic Policy, saying "We expect that the rapid expansion of the economy . . . is going to reflect itself in reducing unemployment rolls."38 Meanwhile, the U.S. trade deficit to Japan had not been reduced at all. The U.S. demand that Japan reduce its trade deficits was often raised at U.S.-Japan meetings. For instance, as described earlier, President Nixon and Premier Tanaka discussed, along with Japan's China policy, a need to resolve the trade imbalance, and Tanaka promised that the Japanese government would carry out the imminent purchases of 1.1 billion dollars of U.S. goods. In the U.S.-Japan commerce meetings held in February, 1972,

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February, 1973, and May, 1973, the United States Trade Representatives repeatedly invoked the possibility of enforcing unilateral import restrictions unless the Japanese government could carry out satisfactory export restraints. Moreover, at the private level, the first meeting of the Japan-U.S. Businessmen's Conference was held in June, 1972, where representatives in the business community, agricultural associations, consumers, and scholars in both countries discussed the current U.S.-Japan trade imbalance.39 All in all, however, these meetings only served to provide a forum for the airing of both governments' opinions and to keep the trade friction manageable. They did not create any substantial resolution. Compared with such issue-by-issue and meeting-by-meeting approaches up to 1972, the second term of the Nixon presidency saw the U.S. design a more comprehensive policy toward Japan, which included both security and economic issues. ICissinger wrote to the President regarding Japan after his February, 1973, visit to Asian countries: We will need to pay great attention to our relations with Japan as it continues to cast about for a political role more independent of us and cornmemurate with its economic strength. In particular, we will need to d e ~ e l o pa coherent o ~ e r a l political l approach rather than getting hogged down in economic arm-wrestling. And we will need to relate our Japan policy to our European policy, especially in the economic areas.40

Given ICissinger's strategy, the "Year of Europe" proposal was announced in April, 1973, which sought to bring the Western bloc together under U.S. control. What attracted Japan's attention, however, was President Nixon's State of the Union Address, delivered in Congress on May 3, 1973. The foreign policy portion of the speech, much of which was written by Kissinger, argued that U.S. economic relations with Japan should be designed in relation to the overall security arrangement: It was inevitable that [the] transition into a new political environment would pose a particular challenge for Japan . . . Japan no longer needed or could afford an almost exclusive concentration on her economic adTancement or a habit of acting as a junior partner. . .Japan was no longer just a regional Pacific power dependent on the United States . . . The intimacy of the postwar alliance, however, inevitably gave Japan a special sensitivity to the evolution of the United States foreign policy. We thus found the paradox that Japan seemed to feel that her reliance on us should limit change or initiati~esin American policy, w e n while she was a c t i ~ e l yseeking new directions in many dimensions of her own policy . . . The [economic] problem is an international one . . . [Tlhe basic problem is structural, and the solution is a thoroughgoing multilateral reform of the system . . . It is 110 accident that the U.S.-Japan Security Treaty commits our two nations to 'seek to eliminate conflict in their international economic policies and . . . encourage economic collaboration between them.'

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Without conscious effort of political will, our economic disputes could tear the fabric of our alliance.ql

Surprised at the contents of the report, the Japanese Foreign Ministry stated that the U.S. view of Japan now had become more harsh than in previous years, and that it indicated a serious U.S. readiness to emphasize the importance of economic relations with Japan rather than the security alliance.42 The U.S.-Japan economic negotiations, however, did not produce any substantial progress. In accordance with the President's State of the Union Address, the Nixon administration sought to link continued U.S. provision of security to Japan's concessions on economic issues, a linkage which the Japanese government rejected, claiming that Japanese postwar foreign policy had been based on the separation of politics and economies. The second meeting of the Japan-U.S. Businessmen's Conference, held in June, 1973, also suggested that the Japanese government increase its official development aid to one percent of its GNP, unless it could increase its defense budget. These meeting sought to reevaluate the overall U.S.-Japan relationship, suggesting a need to reform Japan's overall foreign policy.43 O n the surface, the Tanaka cabinet supported Nixon's "Year of ELIrope," and the Nixon-Tanaka July, 1973, summit expressed Japan's readiness to continue its effort to resolve the trade imbalance. Tanaka earmarked an enormous budget to stimulate the domestic economy to absorb foreign products. On the other hand, the U.S. government sought to create a trade-monetary link in the overall foreign policy design of the Western bloc. At the ministerial meeting of GATT, Shultz met with Premier Tanaka, MITI Minister Nakasone, Finance Minister Aichi, and others, and discussed U.S.-Japan economic relations, the Soviet food crisis, energy matters, and planning for a monetary conference. In his report to the President after the meeting, Shultz argued, "The policy of liberalizing world trade cannot be carried out successfully in the absence of parallel efforts to set up a monetary system which shields the world economy from the shocks and imbalances which have previously occurred."l4 The seemingly comprehensive U.S. policy toward Japan was rejected when the oil crisis (called "oil shock" in Japan) occurred in October, 1973. Given Japan's poverty in natural resources, the Tanaka cabinet faced a dilemma between the Americans' pro-Israel position and Japan's need to pursue friendship with Arab countries. In response to Premier Tanaka's question of whether the U.S. government could guarantee Japan's need for oil if the Japanese government followed the U.S. pro-Israel policy, IZissinger gave a negative answer. It was then that the Tanaka cabinet to decide to distance itself from switch its pro-Israeli position, as did major ELIropean countries. Given the situation, IZissinger bitterly commented that the Europeans were "craven" and "contemptible." Not only had hopes for the "Year of Europe" faded, but Western Europe had become his "deepest problern."4' In the face of Japan's pursuit of its own national interest, his

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design articulated in the President's State of the Union Address was also turned down. In 1976, after becoming Secretary of State, I
NORMALIZATION WITH NORTH VIETNAM:

THEIMPACT OF THE FIRST"NIXONSHOCI? The two Nixon "shocks" made Japanese leaders suspicious of the established U.S.-Japan relationship. Japan's pursuit of an autonomous foreign policy finally manifested itself in its approach to, and diplomatic normalization, with North Vietnam.4' Given the fact that one of the primary goals the Nixon administration had pursued-starting with its opening to China-was to isolate North Vietnam and to end the Vietnam war, Japan's approach to North Vietnam was a matter for great concern for the U.S. government. Before documenting the normalization process, a brief history of Japanese foreign policy toward Vietnam after World War I1 should be described. Until Japan invaded the Indochinese peninsula in 1941, Vietnam had been colonized by the French. The defeat of Japan in World War I1 allowed France to regain influence and to try to turn down the Vietnamese independent movement. In the 1954 Geneva Accords, it was agreed to temporarily partition Vietnams. The U.S. government began immediately to undermine the accords by creating a viable South Vietnamese state. Then in 1960, the Japanese government normalized diplomatic relations with South Vietnam. Both states concluded a peace treaty, in which the Japanese government agreed to pay war reparations of 39 million dollars (11 billion yen) to the Gho Di Diem regime. Since major Japanese industries and politicians had an interest in natural resources in the Indochinese peninsula during World War 11, one of the objectives of the normalization with South Vietnam was for the Japanese government to maintain economic ties in Southeast Asia. O n the contrary, Japan's relations with North Vietnam were limited strictly to non-governmental, economic relations, similar to PRC-Japanese

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relations before their normalization, which emphasized Japan's importation of coal and other mining products from Hon Gay. The amount of trade always fluctuated around 10-12 million dollars annually (including both import and export), even during the Vietnam War.4" At the governmental level, Japan's contact with North Vietnam centered on such non-political activities as introducing North Vietnamese students to Japanese universities, and providing developmental assistance through the International Red Cross. To the U.S. government, however, even such nonpolitical activities were viewed as opposing the Nixon administration's strategy of an "honorable retreat." For instance, a White House memorandum indicated that "we are generally in favor of greater Japanese development activities in Southeast Asia and elsewhere. However, we cannot agree to any public or private Japanese assistance to the North Vietnamese."l9 In the Ministry of Foreign Affairs, some officials believed that the Japanese government needed to seek ties with North Vietnam under the principle of separating economic policies from politics. For instance, the Consulate General in Hong Kong Akira Okada, in consultation with the North Vietnamese Trade Representative, requested the Tokyo Headquarters to enlarge economic exchanges and conduct inter-governmental contact with Hanoi. Moreover, Wasuke Miyake, Chief of the First Southeast Asian Section of the Foreign Ministry, advocated expanded economic exchanges in terms of the possibility of normalizing diplomatic relations. The Foreign Ministry in Tokyo, however, concerned that such activities of the Japanese government would prevent U.S. withdrawal from Vietnam, turned down their suggestions in the interest of maintaining the U.S.-Japan partnership.jo The Impact of the "Nixon Shock" Nixon's July 16, 1971, announcement of the U.S. opening to China radically changed Japan's inaction. As earlier stated, the announcement prompted fear among Japanese leaders that the established U.S.-Japan alliance would substantially change in conjunction with shifts in U.S. global objectives. China's accommodation with the U.S. also inspired North Vietnamese leaders' fear that "[the Chinese] at heart, wanted to make use of the Vietnam question for the settlement of the Taiwan issue first. China subsequently did begin to exert extreme pressure on Hanoi in order to accept a political compromise in Saigon, and thus to accept a continued Thieu In Japan, Miyake thought that "since the U.S. government had no intention of notifying us of such a significant policy initiative toward the PRC, we can also approach Hanoi without any consultations with the United States."j2 Then, Japan's approach to North Vietnam, first led only by a few Foreign Ministry officials, increasingly attracted support from the entire Sato cabinet. Premier Sato and Foreign Minister Fukuda,

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although not in public, were eager to have governmental contact with North Vietnam. As Sato's approach to the PRC after the "Nixon Shock" indicated, the Japanese government sought to contact Hanoi without the U.S. government's knowledge. In November, 1972, when, regarding Sino-Japanese relations, Zhou Enlai uncovered the Hori Letter, Miyake asked permission to visit Hanoi through the North Vietnamese Embassy in Paris. Moreover, the Foreign Ministry in Tokyo sent a confidential memorandum to Okada in Hong Kong, saying that, "faced with new situations in the world, like Nixon's visit to China and the PRC's entry into the United Nations, the Foreign Ministry has reconsidered Japanese foreign policy toward North Vietnam. The Ministry has decided to expand economic relations with North Vietnam, and to exchange a few permanent officials of trade companies for this purpose. Also, the Ministry would like to send a few officials secretly to Hanoi, in order to exchange opinions on this issue with the North Vietnamese g ~ v e r n m e n t . " ~Compared : with the Ministry's attitude of sticking to the U.S. containment policy in June, 1971, the Japanese government was now forced to reconsider its foreign policy objectives, after Nixon announced the Sino-U.S. accommodation. In response to Japan's several inquiries, the North Vietnamese government sent the following answer on January 5, 1972: (1) The North Vietnamese government agrees in principle to exchanging trade representati~es. ( 2 ) The North Vietnamese government allows two Foreign Ministry officials to visit Hanoi. (3) The North Vietnamese government suggests that future dialogue with the Japanese government be conducted in Paris.54

One of the reasons why the North Vietnamese government, which had thought of Japan as a U.S. ally, agreed to inter-governmental contact, was that leaders in Hanoi were concerned about the possibility of failure in the upcoming attack on South Vietnam, which they planned to conduct in February, 1972. Given the fact that China provided Hanoi with war support, they were afraid that Nixon's upcoming visit to Beijing would result in a cut-off of Chinese support for North Vietnam. Driven largely by the fear of abandonment from each alliance, both the North Vietnamese and the Japanese governments found a common interest in exchanging opinions over their foreign policies.

U.S. Criticisms and Japan's Autonomous Overtures toward North Vietnam The Japanese government notified Washington of the Foreign Ministry officials' visit to Hanoi. As soon as the news reached Washington, the U.S. government strongly opposed the governmental contact between the two

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states. At the beginning of 1972, the Nixon administration made a speech on Vietnam that was designed to put pressure on North Vietnam to agree to an armistice. Neither Moscow nor Beijing objected to the U.S. plan, and both privately urged the Vietnamese to make a compromise.jj In light of the White House objective, Japan's governmental approach to Hanoi seemed designed to raise obstacles against the U.S. effort to retreat from Vietnam honorably. Kissinger argued that "it is all right for the Japanese to normalize relations with the Chinese, but never with the North Vietnamese."j6 A similar statement by Kissinger can be seen in a memorandum of conversation among Sato, Nixon, and Kissinger, when Sato, after he resigned from prime minister, privately met with Nixon in January, 1973. According to the memo, they recalled how difficult it was for the Nixon administration to negotiate with the Vietnamese for an armistice in the Indochinese peninsula. Sato recalled that "Dr. Kissinger had declined an earlier offer to help in the negotiations via a Japanese channel into Hanoi, from which fact [Sato] could estimate the great resolve of the United States . . . North Vietnam might have been strengthened a bit in its resolve, and thus more difficult to deal with, if approached by Japan, on the assumption that such an approach indicated that [North Vietnam] had a friend"j7 The criticisms of the U.S. government stemmed from its concern that Japan's approach to North Vietnam would endanger the Nixon administration's efforts to end the Vietnam War. Yet, little by little, Washington came to think that as long as Japan's contact with Hanoi did not disturb the U.S. strategy of an "honorable retreat," it would be acceptable for the Japanese Foreign Ministry to send a few officials to North Vietnam.58 In Washington, the Japanese Ambassador Nobuhiko Ushiba persuaded officials in the White House and State Department that Japan's contact with North Vietnam would not disturb the U.S. objective. At last, Under Secretary of State Alexis Johnson conveyed a message to Ushiba, saying that, "Given the fact that the U.S. government plans to conduct the North bombing from early February, and that President Nixon will visit Beijing from February 11, we no longer oppose the Japanese Foreign Ministry sending its officials to North Vietnam, provided that they can leave Hanoi before Nixon arrives in Beijing. Moreover, the U.S. government would like to know South Vietnamese President Thieu's opinions on this 1natter."~9 Given the response from the U.S. government, the Japanese Foreign Ministry decided to send Wasuke Miyake to Hanoi. During the process prior to the decision, the Sato cabinet supported Miyake's visit, because it was meant to oppose the traditional Foreign Ministry's emphasis on the U.S.-Japan relationship. The Ministry's intense objections against Miyake's "self-confident" action were allayed by Foreign Minister Fukuda, who persuaded the Chief of the Asian Bureau (Miyake's superior) to admit Miyake's visit to Hanoi.6o Moreover, when Miyake met with some North Vietnamese economic officials during his first visit, Premier Sato himself announced support for Japan's economic exchanges with North Vietnam.6' Copyright 2003 by Taylor & Francis Books, Inc.

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As a result, Miyake planned to enter Hanoi via Paris where he was supposed to receive his visa. Given the absence of formal diplomatic relations, however, Miyake (He used Sato as his pseudonym) had to enter Hanoi as a private visitor, invited by the North Vietnamese Chamber of Commerce. Yoshisaburo Inoue, in the same section of the Ministry, and fluent in Vietnamese, accompanied Miyake by adopting Tanaka as his pseudonym. Both were to leave first for Paris, in order to receive their visa from the North Vietnamese Embassy there. They, however, received their visa in Vientiane after an expectedly longer stay, and were able to arrive in Han0i.6~During his visit to Hanoi, concerned about both states' objections, the North Vietnamese government kept his visit secret from both the Soviet and the Chinese governments. Although Soviet support for North Vietnam had exceeded that provided by the Chinese by late 1971 or early 1972, Hanoi could not disregard the Chinese influence in conducting the war against South Vietnam.63 The next section discusses the contents of both governments' negotiations, and documents the process culminating in the normalization signed in September, 1973. While the Sato cabinet approached North Vietnam as a reaction to the sudden announcement of the Sino-U.S. accommodation, the Tanaka cabinet paid attention to the signing of the Paris Accords before proceeding to the normalization.

NORMALIZATION WITH NORTH VIETNAM:THEMEANING OF AUTONOMYIN FOREIGN POLICY

JAPAN'S

Miyake visited Hanoi twice, first in February, 1972, and second in MarchApril, 1973. The first meeting only sought to verify the continuation of non-governmental, economic relationships between both countries, while the second, given the success of the Paris Accords, identified the specific issues to be negotiated for the establishment of the diplomatic relationship. Based on the issues articulated by Miyake's visit, the ministerial level negotiations were carried out in Paris during July-August, 1973, and the normalization was signed on September 21, 1973 (although both governments were unable to resolve issues over the recognition of the Provisional Revolutionary Government in South Vietnam and the amount of war reparations, which prevented them from exchanging ambassadors until Saigon fell to the North Vietnamese in April, 1975). Wasuke Miyake and Yoshisaburo Inoue arrived in Hanoi on February 8. In accordance with the agreement with the U.S. government, Miyake stayed in North Vietnam for three days, and left just before Nixon arrived in Beijing.G4 Although Miyake visited Hanoi officially as a guest of the North Vietnamese Chamber of Commerce, members in the Chamber were also major officials of the North Vietnamese Communist Party. At the meeting, Miyake stated the Japanese government's readiness to resume

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diplomatic relations, although the main issues of the negotiation ranged more generally from the Vietnamese perception of Nixon's upcoming visit to Beijing, the impact on the Vietnam War of his visit, and North Vietnam's opinions on econoinic recovery after the end of the war, to the future relations between North Vietnam and Japan.6' After a general exchange of opinions, he proposed the following: (1) Given the Japanese government's principle that separates politics from economies, the Japanese gowxnment proposes to first enlarge trade and economic relations with North Vietnain.66 ( 2 ) Howe~el;the Japanese gowxnment has no intention of altering the established security relationship with the United States. (3) Understanding the above two propositions, the Japanese government seeks to resume diplomatic relations with North Vietnam in the long run.6'

According to Miyake's statement at a press conference, his first visit was not designed to "alter substantially Japan's position toward [the] Vietn a m ~ . "The meeting did not go further than the three issues, and only endorsed a need to continue discussions between both governments. Miyake said that "there were no specific negotiation issues regarding the diplomatic normalization, nor any discussions regarding Japan's official development aid."68 After Miyake left Hanoi, however, Inoue remained in North Vietnam three more days, visiting Hon Gay and Haiphong, the seaport conduit for Hon Gay coal. Instead of formal development assistance, Inoue reached an agreement on exporting mining facilities to North Vietnam in coordination with Japanese trading companies and banks. O n March 30, it became public that Mitsui and Sumitomo Trading Companies were planning to develop a large coal extraction project, along with financial support from the Japan Export-Import Bank.69 Given the fact that the Japanese government was not able to provide official development assistance to unrecognized North Vietnam, Miyake's first visit succeeded in cultivating Japan's economic relations (specifically extractive industries) with North Vietnam through a private, but government-related bank.'0 In the United States, Miyake's visit to Hanoi was reported as the beginning of Japan's independence from the United States. The February 25, 1972 New York Tzmes reported that: Taken together [the sending of Foreign Ministry officials to Hanoi, Gromyko's visit to Tokyo, and Japan's recognition of Mongolia in February 19721, the latest gestures were regarded as signifying that Japanese foreign policy is growing increasingly independent in response to the new Chinese-American relationship . . . Tokyo is known to feel that the Nixon policies toward China h a x isolated the Japanese in Asia and that, therefore, they must seek new solutioils and friendships.'l

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In his first visit to Hanoi, Miyake discussed only the need to advance economic relations, although the negotiations also raised the possibility of moving ahead toward resuming diplomatic relations. Japan's emphasis on the U.S.-Japan relationship and support for South Vietnam prevented the Sato cabinet from any quick moves toward normalizing relations.'2 After the Paris Accords were signed on January 27, 1973, however, the Japanese government became increasingly enthusiastic about its relationship with Hanoi. In the February, 1973, meeting of the Finance Committee of the Japanese Diet, Foreign Minister Masayoshi Ohira stated that "the Saigon government is not the only legitimate government even in South Vietnam . . . There is no reason why the Japanese government should hesitate to resume diplomatic relations with North Vietnam."': In the Diet, both the Finance and the Foreign Affairs Committees requested that the government make efforts to normalize Japan's relations with North Vietnam. The Japanese government decided to send Miyake again to Hanoi. Before sending him to Hanoi, however, the Japanese Foreign Ministry held an ambassadorial meeting in Bangkok on February 18. It was attended by Japanese ambassadors of South Vietnam, Laos, Cambodia, Thailand, Indonesia, Malaysia, Singapore, the Philippines, the Foreign Ministry's Vice Minister Shinsaku Hogen, and Miyake. They concurred that, since other Southeast Asian countries did not disagree with Japan's restoration of relations with North Vietnam, the policy of consolidating the "Two Vietnams" would stabilize the turbulent Indochinese peninsula. Hogen stated that "Japan's normalization with North Vietnam is not an issue of doing or not doing, but just a matter of when we will do it."'4 The North Vietnamese government requested a second visit by Miyake through a confidential telegram on March 15, 1973, saying that the official would be officially reinvited by the North Vietnam Chamber of Commerce. The North Vietnamese government sent the Vice President of the Chamber of Commerce, and provided him with plenary power for negotiations with the Japanese officials. The second visit sought to identify both governments' conditions for normalizing their diplomatic relations. In the negotiations, North Vietnam identified three conditions: (1) The Japanese government should recognize the Provisional Revolutionary Government (PRG). (2) The Japanese government should pay war separations to North Vietnam. ( 3 ) The Japanese g o ~ e r n m e n tshould stop transporting weapons and munitions from the U.S. bases in Japan to South Vietnam."

Along with the negotiations, the Miyake mission met with the Vice Minister and the Chief of the Asian Section of the Foreign Ministry, as well as the Vice Minister of the External Trade Ministry.'6 They also visited Haiphong and Hon Gay again, in order to look further at extractive industry in North Vietnam.

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After Miyake's second visit, mutual visits of delegations increased both in quantity and quality. The Japanese government gradually relaxed its restriction on the entry of North Vietnamese delegations invited for political purposes by the Japanese Communist and the Socialist Parties. In July, the government admitted a delegation including both North Vietnamese government and south PRG members, which was invited by the Japan-Vietnain Friendship Association and the Japan Committee to Support the Vietnamese People. The PRG members were admitted to enter with North Vietnamese passports." In April, Foreign Minister Masayoshi Ohira announced that North Vietnam was willing to start formal negotiations on the establishment of diplomatic relations with Japan. He said that there were no major obstacles, and that the Japanese government would move ahead toward the restoration of relations.'Ufter the statement, the Foreign Ministry began to consider a bilateral aid provision to North Vietn a ~ n . ' ~Both governments officially decided to open talks on the normalization in Paris in July, 1973, and the negotiations were expected to center on the three issues Miyake made clear in his visit.80 Meetings in Paris and Normalization with North Vietnam The negotiations between North Vietnam and Japan started in Paris on July 25, and both governments concluded the normalization of diplomatic relations on August 14. The two governments desired a quick agreement, so they bypassed the three problems mentioned above with a tacit understanding that they would be negotiated later on. The Japanese government thought-given that many Western countries had already resumed relations with Hanoi, Japan should not get behind, especially if it wanted to lead the postwar reconstruction in Indochina. The North Vietnamese also thought that normalization with Japan would strengthen its hand in diplomatic competition with the Saigon government.81 Meanwhile, in the United States, the White House issued NSDM 210 on April 11, 1973, regarding an economic development plan for South Vietnam: The President has decided that the U.S. will provide sufficient assistance to permit the level of imports necessary for rapid recoyery of the economy . . . At the appropriate time Congressioilal authority will he sought for a l e d of funding for next year sufficient to assure continuation of essential economic stability and rehabilitation in South Vietnam.81

In accordance with the memorandum, President Nixon emphasized the need to support the South Vietnamese economy after the end of the war at the Nixon-Tanaka meeting, held July 31-August 1, 1973. The Nixon administration was still concerned that the new Hanoi-Tokyo relations would strengthen the North Vietnamese position after the war. The joint communique announced that ''[the President and the Prime Minister] expressed their strong hope for a stable and lasting peace in Indochina Copyright 2003 by Taylor & Francis Books, Inc.

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through scrupulous implementation of the Paris Agreements. They reaffirmed their resolve to assist the rehabilitation of Indochina."83 Premier Tanaka also promised President Nixon that the Japanese government would provide developmental assistance to Saigon, in addition to Hanoi, when diplomatic relations would be resumed. After the meeting, the Japanese government decided to provide 50 million dollars from the fiscal 1973 supplementary budget for South Vietnam's economic rehabilitation34 O n September 21, 1973, both the Japanese and the North Vietnamese governments announced the establishment of their diplomatic relations in Paris. The Japanese Ambassador Yoshihiro Nakayama and the North Vietnamese Charge d'Affaires Vo Van Sung (later ambassador to Japan) announced in their joint communique that "Desirous to develop the relations between the two countries, the Government of the Democratic Republic of Vietnam and the Government of Japan have decided to establish diplomatic relations with each other and exchange diplomatic representatives at the level of ambassador extraordinary and plenipotentiary."" The Japanese government thus became the sixty-second state to recognize North Vietnam." Recognition was accompanied by a pledge to provide Hanoi with a 20 million dollar grant ( 5 billion yen) for the fiscal year 1973 if Hanoi officially requested it. This amount would balance the aid promised to South Vietnam for the same year: a 20 million dollar grant and a 30 million dollar 10an.8~ In consideration of the Saigon government, the Information Bureau of the Japanese Foreign Ministry said that "Japan's basic attitude toward South Vietnam remains unchanged," and added that "Japan considers the Republic of Vietnam Government as the sole legitimate representative in South Vietnam."" Japan decided to address both North and South Vietnams as separately independent nations, as agreed in the Paris Accords39 Judging from the concluded agreement with North Vietnam, the Japanese government deferred to the U.S. foreign policy objectives of maintaining the Saigon government, but took an autonomous line on seeking its own goal of normalizing relations with the Hanoi government. While the initial overtures toward Hanoi started as Japan's negative reaction to Nixon's announcement of the U.S. opening to China, the autonomy in foreign policy gradually conformed to the Nixon-Kissinger strategy toward Vietnam. In this sense, the meaning of autonomy was not necessarily opposite of subordination.

This chapter has addressed an autonomous aspect of Japanese foreign policy after the "Nixon Shocks," focusing on U.S.-Japan economic negotiations and normalization with North Vietnam. Since the Sino-U.S. rapprochement and the resumption of Sino-Japanese diplomatic relations turned the international systemic configuration in East Asia from bipolarity

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into a semblance of multipolarity, the Japanese government found a need to distance itself from the United States in making foreign policy. As a result, Japan's unquestioned subordination yielded to increased independence. In terms of the theory of the "alliance dilemma," U.S. accommodation with the PRC stimulated the Japanese government to pursue a more autonomous foreign policy from that of the United States. The fear of abandonment, which emerged after Nixon's announcement of the U.S. opening to China, prodded Japanese leaders to seek ties with communist countries in East Asia and beyond, and the Japanese government normalized diplomatic relations with Mongolia, the PRC, East Germany, and North Vietnam in the early 1970's. Given the fact that the U.S. and Japan had a common interest in the policy of containment in East Asia, and this had prevented the Japanese government from cultivating diplomatic relations with these communist countries until the early 19707s,Japan's rush toward normalization with the communist nations was meant to reduce the fear of abandonment, a fear which Japanese leaders had never experienced until the first "Nixon Shock." Explanations based on triangular models, introduced in Figure 2-1 and 2-2, Chapter 2, depict the overall structure of triangular relationships between China, the U.S., and Japan at that time. The restoration of ties between the PRC and Japan erased the prior estranged relationship between the two states. For the U.S. government, the best way to gain leverage in the triangular diplomacy was to play off the other two estranged actors against each other. Thus, before announcing the accommodation with the PRC, the Nixon administration exploited the estrangement of the SinoJapanese relationship. In the overall "issue linkage" strategy in the Nixon presidency, the U.S. government was able to put a wedge in Sino-Japanese relations, and to have leverage over Japan, by resorting to the threat of "communist China." The Sino-American rapprochement and the SinoJapanese resumption of ties repudiated ideologically-driven Japanese views toward China. In that process, the "China threat" as a communist power weakened in Japanese policymakers' perceptions. The new autonomy of Japan's foreign policy was represented in two issues. First, although not explicitly, the Japanese government was increasingly reluctant to follow U.S. demands on economic issues. While announcing a need to cooperate with the U.S. in the joint communique, the Tanaka cabinet put more emphasis on loosening financial policy, and on introducing the float as its reaction to the U.S. demand of the 1 0 percent yen appreciation. Second, the September 21, 1973, recognition of North Vietnam, which the U.S. government failed to do until July 11, 1995, indicated Japan's new perspective toward cultivating diplomatic ties in Southeast Asia. The search for a new political and economic role, including a new relationship with the PRC, reflects the pursuit of a foreign policy independent of that of the U.S. government.90

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While pursuing autonomy, however, the Japanese government always kept U.S. foreign policy objectives under consideration, although not enough to satisfy the Nixon administration. The Japanese government, however, did not seek autonomy to the degree the Nixon administration thought. Japan's overtures toward the Asian communist countries simply sought to widen the alternatives of Japanese foreign policy, at a time when leaders in Japan faced a drastic change in the international systemic structure. Detente, as a strategy for enabling the U.S. to draw allies' economic concessions, required a delicate balance in U.S. relations with the communist world. O n the one hand, the Nixon administration needed to reduce the threat posed by the communist bloc so as to gain leverage for demanding allies' concessions. O n the other hand, Nixon and Kissinger needed to maintain a degree of perceived communist threat so that their allies would make some concessions in exchange for continued U.S. provision of security against the PRC or the Soviet Union. Therefore, U.S. detente policy actually pursued leverage both in the "adversary game" and in the "alliance game," by manipulating the communist threat. However, by both reducing allies' fear of the common adversary, and by increasing their fear of being abandoned by the United States, the U.S. detente policy heightened allies' willingness to pursue a separate peace with communist states.

NOTES 'The seventh paragraph of the joint communiqui, which included the term "hegemony," reads as follows: The norinalization of relations between Japan and China is not directed against any third country. Neither of the two counties should seek hegemony in the Asia-Pacific region and each is opposed to efforts by any other country or group of countries to establish such hegemony. 'Unlike the Nixon administration, however, the Japanese government had no intention of playing off the communist powers against each othec Sadalzo Ogata, Normalization with China: A Comparative Study of U S . and Japanese Processes (Berkeley: Institute of East Asian Studies, University of California, 1988), pp.

78-79. 3Memo from Henry A. Kissinger to the President, "My Trip to China," March

2, 1973; White House Special Files, President's Office Files, NameISubject Files, Box 6; National Archives, College Park, MD. "eking NCNX Interilational Ser~ice,October 23, 1972, in Foreign Broadcast Information Service (FBIS), October 24, 1972. Wemorandum from the President's Files, "Foreign Minister Ohira Call on the President," October 18, 1972; National Security Archive, Washington, DC. 6Alzihilzo Tanalza, Nicchu Kankei @no-Japanese Relations) (Tolzyo: Tolzyo University Press, 199l),pp. 87-88. As documented in Chapter 4, Soviet Foreign Minister Gromyko visited Tokyo in Januar!; 1972. In the meeting, he suggested that Japan become a ineinher of a security arrangement based on putting pressure on the PRC. 'The sixth paragraph of the Sino-Japanese joint communiqui states that "[both sides] agree to establish relations of perpetual peace and friendship between the Copyright 2003 by Taylor & Francis Books, Inc.

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two countries on the basis of the principles of mutual respect for sovereignty and territorial integrity, inutual non-aggression, non-interference in each other's internal affairs, equality and mutual benefit and peaceful co-existence." Wgata, Nornzalization with China, pp. 78-79. 9Richard Smolze, National Security and Nuclear Dilemma: An Introduction to the American Experience in the Cold War, Third Edition (New Yorlz: McGraw-Hill Inc., 19931, pp. 152-53. loRichard H. Solomon, Chinese Political Negotiating Behavior; 1967-1 984 (Santa Monica: RAND Corporation, 199.51, p. 77. llMemo from Henry A. IZissinger to the President, "My Trip to China," March 2, 1973 (in. 3). In IZissinger's memo to the President, he intentionally picked up the Taiwan issue at the outset of the conversations. ICissinger also said to Zhou that since the Vietnam War was over, the U.S. was ready to reduce some of its armed forces on Taiwan. l?Solomon, Chinese Political Negotiating Behavior, p. 59. Until the U S . government norinalized relations with the PRC, howevel; Eeijing would not agree to any activities that even suggested its acquiescence to a "two China" policy. For instance, Chinese officials would not visit the U.S. until Washington broke relations with Taipei and recognized Beijing as the sole legitimate government of China. lvbid., p. 125. 14Memorandum of Conrersation, M a o Tsetung, Chou En-lai, Wang Hai-jung, Henry Kissingel; Winston Lord, and other interpreters, February 17-18, 1973; National Security Archive, Washington, DC. In response to Mao's question, ICissinger answered, "We did not favor this policy. We preferred the German opposition party which did not pursue this policy," and assured M a o that there would be no plan for the U.S. gorernment to reduce American forces in Europe for the next four years. 1jRohert S. Ross, Negotiating Cooperation: The United States and China, 1969-89 (Stanford: Stanford Unirersity Press, 199.51, pp. 50-51. 16Memo from Henry A. IZissinger to the President, "My Meeting with Chairman Mao," February 24, 1973; National Security Archive, Washington, DC. I7Ross, Negotiating Cooperation, pp. 51-52. IsMemo from Henry A. ICissinger to the President, "Reports on Meetings with Brezhne~," May 11, 1973; White House Special Files, President's Personal Files, NaineISuhject, 1969-74, Box 14 (Russia); National Archives, College Park, MD. 19Memofrom Henry A. IZissinger to the President, "Meeting with PRC Liaison Office Chief Huang Chen," May 29, 1973; White House Central Files, Subject Files, CO, Box 2 0 ( C O 34-2, the PRC); National Archives, College Parlz, MD. 20Nixon's Press Conference, March 24, 1972, in Johnson, The Nixon Presidential Press Conferences, pp. 243-44. 'IMemorandum for the President's Files, "Foreign Minister Ohira Call on the President," October 18, 1972 (fn. 5). 22Departnwnt of State Bulletin, May 14, 1973, pp. 593-94. 2"ohn Lewis Gaddis, Strategies of Containment: A Critical Appraisal of Postwar American National Security Policy (New York: Oxford University Press, 19821, p. 3.32. '4Memo from Henry A. IZissinger t o the President, "Next Steps in The Year of Europe," May 11, 1973; White House Special Files, President's Personal Files, NameISubject Files, 1969-74, Box 14 (Russia); National Archives, College Park, MD. Underlined in the original. Copyright 2003 by Taylor & Francis Books, Inc.

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'jMemo from Henry A. IZissinger to the President, "My Asian Trip," February 27, 197.3; White House Special Files, NaineISuhject Files, Box 6; National Archives, College Park, MD. 26Address by Peter G. Peterson, "Japan and the United States," United States Department of Commerce News, June 7, 1972; White House Special Files, Staff Member and Office Files, Box 48; National Archives, College Parlz, MD. "Paul A. Volclzer and Toyoo Gyohten, Changing Fortunes: The World's M o m ) ' and the Threat to American Leadership (New York: Times Books, 19921, pp. 104-05. 2Vublic Papers of the Presidents of the United States: Richard Nixon, 1972 (Washington, DC: United States Government Printing Office, 1974), pp. 908-09. '9Harold James, International Monetarjl Cooperation since Bretton Woods (Oxford: Oxford University Press, 19961, p. 247. "Volcker and Gyohten, Changing Fortune, p. 119. 31Asahi Nenkan, 1974, p. 301. 3'Asahi Shimbun, January 1, 1972, cited in IZusano, "Two Nixon Shocks," pp. 35-36. "For instance, Intelligence Memorandum, Japan's Seven Point Economic Program: An Assessinent, Central Intelligence Agency, Jul!; 1972; National Security Archive, Washington, DC 34Volcker and Gyohten, Changing Fortunes, pp. 106-112; ICunio Yanagida, Nihon wa Moeteiruka (Is Japan Burning?), (Tokyo: IZodansha Publishing Coinpan!; 1983), pp. 365-72. ~Volclzerand Gyohten, Changing Fortunes, pp. 130-31. "Yanagida, Nihon wa Moeteiruka, p. 378. "'Memo from Peter G. Peterson to the President, "Progress Report-Trade Negotiations in Conjunction with Monetary Talks," December 10, 1971; White House Special Files, President's Office Files, Box 15; National Archives, College Parlz, MD. "Nixon's Press Conference, June 29, 1972, in Johnson, The Press Conferences, p. 265. "Hiroshi Masuda, "Nichi-bei Zaikai-jin ICaigi (The Japan-U.S. Businessmen's Conference), 1971-1991," Gaiko Jiho (Diplomatic Review), Vol. 1298 (May, 1993), pp. 72-73. 40Me1no from Henry A. IZissinger to the President, "My Asian Trip," (in. 25). The main purpose of his visit to Asian countries at that time was to discuss issues in Asia after the signing of the Paris Accords for Vietnam. "The report was entitled "U.S. Foreign Policy for the 1970's: Shaping a Durable Peace." Public Papers of the Presidents of the United States, 1973 (1975), pp. 420-23. 4'Asahi Shimbun, Asahi Nenkan (The Asahi Yearljl Review), 1974, p. 244. "Masuda, "Nichi-bei Zailzai-jin IZaigi," pp. 71-72. "Memo from George P. Shultz, "[The President's] Meeting with Secretary George P. Shultz," September 17, 1973; White House Special Files, White House Central Files, Box 37; National Archiyes, College Park, MD. 4jWalter LaFebel; America, Russia, and the Cold War: 194.7-84, Fifth Edition (New York: ICnopf, 19851, p. 278. Although both Western Europe and Japan opposed to IZissinger's demand for the pro-Israeli position, they renspnded to the crisis differently. While European allies, appreciating their currencies against the Copyright 2003 by Taylor & Francis Books, Inc.

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dollar, made the oil price down for the possible maintenance of its consuptino, the Japanese sought t o depreciate the yen to promote the amount of export, enabling them to pay the additional cost for puchasing oil. Richard C. Thornton, The Nixon-Kissinger Years: The Reshaping of American Foreign Policy, Second Edition (St. Paul: Paragon House, 2001), pp. 314-15. 46Secretary of State Henry A. ICissinger's Speech, July 22, 1976; Bureau of Public Affairs, Department of State. T h e Japanese government normalized its diplomatic relations with Mongolia in February, 1972, with the PRC in September, 1972, with East Germany in March, 197.3, and North Vietnam in Septembel; 1973. 48Masaya Shiraishi, Japanese Relations with Vietnam: 1951-1 987 (Ithaca: Cornell Southeast Asia Program, 19901, pp. 38-39. 49Memo from Alexander Haig to John R. Price, "Proposal regarding Private Japanese Assistance for Vietnam," June 21, 1971; White House Central Files, Country Files (Vietnam), Box 84; National Archiyes, College Park, MD. 'OAkira Okada, Aru Gaiko-kan no Shogen: Mizudori Gaiko Hiwa (Testimony of a Diplomat), (Tokyo: Chuo ICoron, 1983), pp. 185-89; Wasulte Miyalte, Gaiko ni Shori wa Nai (There is N o Victorjl in Diplomacj,) (Toltyo: Solteisha, 19911, p. 137. However, there are some differences between the two officials regarding the implications of expanding economic relations. Miyake put more emphasis on the economic relations as a means to normalize diplomatic relations. In effect, Miyake tried to ignore the telegram sent by Okada, though it had the same substance as his. 'ISeymour M. Hersh, The Price of Power: Kissinger in the Nixon White House (New Yorlt: Summit Boolts, 19831, pp. 375-76. In order to restore the partnership with North Vietnam, Zhou Enlai flew to Hanoi just after Nixon had left Beijing in February, 1972. The North Vietnamese-Chinese summit agreed to the PRC's continued support for the Vietnam War, but it did not actually increase in 1972. See Ross, Negotiating Cooperation, p. 49. '?Interview with Wasulte Miyalte, December 14, 1995; Toltyo, Japan. Regarding Japanese perceptions toward the United States after the "Nixon Shoclts," see Joji Watanulti, "Nihon-jin no Tai-bei Taido (The Japanese Attitude toward America)," Chihiro Hosoya and Joji Watanuki (eds.), Taigai Seisaku Kettei Katei no Nichibei Hikaku ( A Comparative Study on U.S. and Japanese Foreign Decision-Making Processes), (Tokyo: Tokyo University Press, 1977), pp. 291-310. JjOltada, Mizudori Gaiko, p. 190. Translation by the author. jvbid., p. 192. Translation by the authoc jjRaymond L. Garthoff, Ditente and Confrontation: AnwricamSouiet Relations from Nixon to Reagan, Reyised Edition (Washington, DC: The Brookings Institution, 19941, pp. 288-89. '6Interyiew with Miyake. Marshall Green, Assistant Secretary of State for East Asian and Pacific Affairs at that time, offered a similar view regarding Japan's approach to North Vietnam in early 1972. Interview with Marshall Green, March 19, 1996, Washington, DC. See also, Tad Szulc, The Illusion of Peace: Foreign Polic)' in the Nixon Years (New York: The Viking Press, 19781, p. 528. "Memo for the President's Files from James J. Wickel, "Prime Minister Sato's Call on the President," January 31, 1973; National Security Archive, Washington, DC. jqnterview with Green. He said that the U.S. and the Japanese governments started to discuss economic rehabilitation assistance toward Vietnam starting in Copyright 2003 by Taylor & Francis Books, Inc.

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early 1972. In fact, at the Januar!; 1972, U.S.-Japan summit in San Clemente, California, Premier Sato and President Nixon discussed the need for assistance to Thailand, Vietnam, Indonesia, Laos, and Cambodia. The Premier suggested that the assistance be established "outside the Asian Development Bank, in which Taiwan [was] a member but the PRC [was] not." Memo for the President's Files from James J. Wicltel, "Meeting with Eisaltu Sato, January 6, 1972, at San Clemente," White House Special Files, President's Office Files, Box 87, National Archives, College Park, MD. jgOkada, Mizz~doriGaiko, p. 194; Miyake, Gaiko, p. 140; New York Times, February 25, 1972. 6OOMiyalte, Gaiko, pp. 139-140. Foreign Minister Fultuda, who had stayed in Hanoi during World War 11, was sympathetic with Miyalte's visit to a certain extent. 61ICyod0, February 12, 1972, in Summary of World Broadcast (SWB), Fehruary 14, 1972. Q'Miyake, Gaiko, pp. 142-48. 63Garthoff, Ditente and Confrontation, p. 289. 6qAccording to Miyalte, he visited Saigon before going to Hanoi, in order to meet with President Nguyen Van Thieu, and verified that the South Vietnamese goYernment would not oppose their visit to North Vietnam. The author, howevel; cannot find e ~ i d e n c econfirming his meeting with President Thieu. It is usually difficult, in terms of diplomatic custom, for a section chief of the Foreign Ministry to meet with the President of another state. Interview with Miyalte. 6jIZyod0, February 11, 1972, in SWB, February 14, 1972. GGMiyalte, Gaiko, pp. 145-46. 6'Seki Tomoda, "Nichi-etsu Gaiko ICankei Juritsu no IZeii to Sho-mondai: Meiso no IZiseki (A Long Way toward Normalization of Nippo-Vietnamese Relations)," Institute of Asia, Asia University, Research Papel; No. 11 (March 19951, p. 100; Tomoda, "Taietsu Enjo Sailtai no ICeii to Hailtei (The Resumption of Japan's ODA to Vietnam: A Watershed of Japan-Vietnamese Relations)," mimeo, 1995. 68IZyod0, February 12, 1972, in SWB, February 14, 1972. Also, Yorziuri Shimbun, Fehruary 12, 1972. 69ICyod0, March 30, 1972, in SWB, April 4, 1972. 'OConsulate General Okada also emphasized the importance of the H o n Gay coal in overall Japan-Vietnam relations. Oltada, Mizudori Gaiko, p. 191. Miyalte, however, intentionally ignored Oltada's initiatives. 7 1 N eYork ~ Times, February 25, 1972. Explanations within the bracket by the author. "It has to be noted that the Tanaka cabinet put far more emphasis o n resuming Japan's relations with the PRC than with North Vietnam. Unlike Sato who considered the resumption of Japan's relations with North Vietnam as important as normalization with the PRC, Tanalta had priority, first, on the PRC, and second, on the Soviet Union. '3Asahi Nenkan, 1974, p. 245-46. '4Asahi Shimbun, Fehruary 19, 1973. -. /-'Asah Nenkan, 1974, p. 246. Daily Yomiuri, September 21, 1973 in Foreign Broadcast Information Service JFBIS), September 21, 1973. The PRG was established in the South Vietnamese territory in Jul!; 1969 under the banner of the antiAmerican and anti-South Vietnamese governments. At the Paris Accords, the PRG Copyright 2003 by Taylor & Francis Books, Inc.

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was described in the agreement officially as a government which opposed the South Vietnamese govxnment. After the April, 1975, fall of Saigon, the PRG became the sole legitimate goYernment in South Vietnam, hut was absorbed by the North Vietnamese Labor Party in June, 1976. i6Wasulze Miyalze, "Hanoi eno Michi wa Tolzatta (It was far away to get to Hanoi)" Bungei Shunjzt (September 19731, p. 171. "Shiraishi, Japanese Relations with Vietnam, pp. 45-46. 'SI
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place as much emphasis on the normalization with North Vietnam as the Sato cabinet had done. 8iShiraishi, Japanese Relations with Vietnam, p. 47. 8Kyodo, September 21, 197.3, in S W B , September 24, 197.3. 89Although two representatives signed the exchange notes regarding the resumption of North Vietnam-Japan diplomatic relations, both states could not agree on the following issues discussed during the process of the normalization until the fall of Saigon, and no ambassadors were exchanged before the final agreement of the issues. First, the North Vietnamese government was not satisfied with the amount of de~elopmentald (20 million dollars) to which the Japanese government agreed, because they argued that it was less than the amount (390 million dollars = 11 billion yen) paid to the South Vietnamese Dgo Dinh Diem regime in 1960. Second, despite the statement at the time of normalization, the North Vietnamese government argued that the Japanese government needed to recognize the Pro~isionalR e ~ o l u tionary G o ~ e r n m e n t(PRG) as a condition t o the resumption of formal diplomatic relations. The official resumption of diplomatic relations was not achieved until the PRG replaced the South Vietnamese government after the fall of Saigon in April, 1975. The first problem was resolved when the Japanese government agreed to provide developmental aid amounting to 13.5 billion yen in October, 1975. The second issue had no resolution until the fall of Saigon. Considering the deterioration of relations with the United States, the Japanese government did not allow many of the PRG's missions' entry to Japan, although they had passports from the North Vietnamese government. Both governments were unable to exchange ambassadors until these issues were resolved on October 11, 1975. Regarding the more detailed documentation, see Go Ito, "Nichi-etsu IZoltltou Seijou-lta to Nichi-bei IZankei (The Japan-Vietnam Normalization and the U S - J a p a n Relationship)" Seijigakzt Nenpo (JapanesePolitical Science Review), December 1997. 9OMakoto Iokibe, "Kokusai IZankyo to Nihon no Sentaku (The I~lternational Environment and Japan's Foreign Policy Choice)" Tadashi Xruga, et.al., Koza Kokusai Seiji 4: Nihon no Gaiko (Series in International Politics 4: Japanese Foreign Policj,) (Toltyo: Toltyo University Press, 1989), p. 30.

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CHAPTER SEVEN

CONCLUSION: A N ANALOGY O F T H E TRIANGLE BETWEEN T H E DETENTE PERIOD AND TODAY

The basic systemic structure of international relations in East Asia during the early 1970's, on which this study has been focused, was similar in significant ways to the post-Cold War period. The Sino-Soviet split, which left a prospective major power free to realign, provided a harbinger of a more realized multipolarity as we enter the new century. Although hastened by the collapse of the Soviet Union, that shift was also driven by the steady economic growth of Europe, Japan, and China during the Cold War period. In a sense then, the new structural dynamics that began to operate at the end of the 1960's are but a weaker version of forces operating today. While the initial loosening of bipolarity created understandable confusion and missteps in foreign policy, we have the possibility of learning and applying lessons from that period. Chapter 2 laid out the structural pressures unleashed by incipient multipolarity. To review briefly the characteristics of that shift, a less powerful ally finds it difficult to rely fully on its partner's provision of security and economic guarantees, and cultivates new ties with other states, while a more powerful partner, with less incentive to maintain the allied relationship, may seek to draw concessions from its ally by posing the prospect of abandonment. Given the similarity of state responses during a shift toward a multipolar system, this study has depicted Japan's responses to the new U.S. relationship with China, and the U.S. reactions to Japan's overtures toward the PRC and North Vietnam. The end of the Cold War has removed the common ground provided by containment of the Soviet Union, making the reconciliation of the three states' interests far more difficult. In the early 1970's, Japanese leaders described the U.S.-Japan relationship as being in a state of crisis when the "Nixon Shocks" threw into question the premise of the partnership against

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Communism. Given that today's emergent multipolarity originated during the dktente period, this study provides insight into future directions of the three states' relationship in the following two ways. First, the "Nixon Shocks" in the early 1970's stimulated both the U.S. pursuit of economic concessions from Japan (given the relative reduction in Japan's strategic importance), and greater Japanese autonomy in foreign policy (given its accommodation with China, which left Japan with fewer incentives to concede on economic issues in exchange for the U.S. security umbrella). The disappearance of the East-West ideological confrontation today, hence, can further intensify problems in U.S.-Japan ties, making adjustments more difficult. Second, by highlighting the far-reaching impact of the U.S. shift toward China in the early 19707s,this study has presented a perspective on current U.S. efforts to form a region-wide policy for post-Cold War East Asia. In the early 1970's, the new U.S. relationship with the PRC initially (though unintentionally) provided the Nixon administration with enhanced bargaining power with Japan. Now that the Chinese economy expands at a faster rate than that of Japan, U.S. policymakers may be tempted to invoke images of another "China threat" in order to draw Japanese concessions in negotiations. The figure below briefly indicates the similarities of major events between the two periods. First, the Presidents in both periods reconsidered the degree of U.S. commitment to East Asian security, announcing the reduction of U.S. armed forces in the region. President Bush's 1991 decision to reduce U.S. troops in the Asia-Pacific region parallels Nixon's Guam

The Detente Period Jul. 1969 Nixon's Guam Doctrine Jul. 1971 Nixon's Announcement of the Sino-U.S. Rapprochement 1973 The Paris Accords: U S . Withdrawal from Vietnam The Post-Cold War Period Apr. 1990 Bush's Announcement on the Reduction of US. Armed Forces in the Asia-Pacific Region Dec. 1991 The Collapse of the Soviet Union 1992 U.S. Withdrawal from the Philippines Source: Akihiko Tanaka, "1970 Nendai no Anzen Hosho Seisaku no Tenkai (Changes in Japan's National Security Policy in the 1970's)," Gaiko Foramu (Forun on Foreign Affairs), Special Issue on Japan's Security (June, 1996), p.82 Translation and some modifications by the author.

Figure 7-1: Commonalties between the Early 1970's and Post-Cold War Era Copyright 2003 by Taylor & Francis Books, Inc.

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Doctrine in 1969, in which the U.S. government decided to lessen the military involvement from East Asia, and to regionalize the sources of conflict. Second, both the collapse of the Soviet Union at the end of the Cold War and Nixon's sudden announcement of the U.S. opening to China in 1971 signalled dramatic changes in the foundations of the Cold War international system. Given an East Asian systemic structure in which the U.S. and the Japanese governments had sought to contain both the Soviet Union and the PRC during the first two decades of Cold War history, the Sino-American accommodation and Japan's normalization with the PRC in the early 1970's represented the first steps toward the fluidity characteristic of multiplolar alignments. The collapse of the Soviet Union in 1991 completed the shift toward regional multipolarity. Finally, after the major ideological confrontation ended, the U.S. government in both periods decided to implement a substantial reduction of armed forces from places considered important security outposts at the time of ideological confrontation. The U.S. decision to end its military commitment to the Philippines in 1992 parallels its withdrawal from South Vietnam after the Paris Accords were signed in January, 1973. With the realignment of China in the 1970's, as with the disappearance of communist enemies in the 1990's, the U.S. government had less incentive to pay the costs of security and economic guarantees for its allies. The similarities between the two periods also present themselves more narrowly in the U.S.-Japan relationship. First, as U.S. involvement decreases in the Asia-Pacific region, the U.S. government expects a greater role for Japan in the region. During the late 1960's and early 707s, the Japanese government was asked by the United States to supplement the U.S. roles of providing economic assistance to U.S. allies in Southeast Asia, building the Asian Development Bank, and sustaining the region's economic development after the Vietnam War ended. Today, the U.S. government expects Japan to send its Self Defense Force to regional conflicts for peacekeeping operations and to provide financial assistance for such U.S. activities. In the economic area, the Japanese government has become the largest provider of Official Development Assistance (ODA), a role which replaces that played by the United States in the Cold War era. Second, Japan's positive role in East Asia makes some American policymakers and scholars worry about the emergence of military aggressiveness in the region from Japan. Specifically, those concerns focus in part on speculation over whether and when Japan will acquire a nuclear weapon capability, although that option has never seriously discussed within the Japanese government. In the early 1970's, Herman I In today's post-Cold War era, the reduction of U.S. troops in Copyright 2003 by Taylor & Francis Books, Inc.

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East Asia has left not only the U.S. government, but other Asian countries as well, worried about the possibility of Japanese military expansion. The U.S. government confronts a dilemma between seeking greater Japanese "burden sharing" in the pursuit of Asian security, and the danger of Japan's nuclear option stemming from that greater role. I<enneth N. Waltz argued that Japan will be a nuclear power sooner or later, because "[flor a country to choose not to become a [nuclear] power is a structural anomaly . . . Countries with great-power economies have become great powers, whether or not reluctantly."3 The question of whether Japan will go nuclear must be answered by taking both international and domestic factors into consideration. It is worth noting, though, that regional multipolarity, which will stem from the reduction of unipolar U.S. armed forces, provides a structural incentive for American leaders to worry about a nuclear Japan. Finally, the extent to which the U.S. and the Japanese governments strengthen their security relationship depends on how they perceive the "China threat." In the Nixon period, the U.S.-Japan relationship was altered substantially after the Sino-U.S. accommodation. Before the announcement, President Nixon and Premier Sato reached a secret agreement on the reentry of nuclear weapons to Okinawa even after its reversion to Japan, because both leaders were afraid of how aggressive the PRC might be in the near future. After the "Nixon Shocks," however, Japanese leaders sought to distance themselves from the U.S. in making foreign policy decisions, especially toward China and North Vietnam. Today, after the collapse of the Soviet Union, the linchpin of the allied relationship has been the nature of both states' perceptions of the "China threat." Those who regard China as aggressive stress the need to strengthen the security ties between the two nations. For those looking at China as a potential market, however, the high rate of economic growth provides incentives to maintain a positive relationship with the PRC.4 Robert Jervis and Jack Snyder has argued that "failures to think in terms of systemic interconnections produce unintended consequences, many of which exacerbate conflict among states."j The U.S. radical shift toward the PRC in 1971, and the emergence of a regional multipolar structure in East Asia led to misperceptions and unintended tensions between the U.S. and the Japanese governments. In terms of the basic international systemic structure, today's post-Cold War East Asia will provide incentives and constraints similar to those of the early 1970's. Neorealists have emphasized the anarchical characteristic of international politics. The "anarchy," i.e., the "absence of hierarchy," does not mean that international politics are only a gathering of states. Rather, it implies something over the state level, the structure of which affects foreign policies of each actor. The "unintended consequences" are not just misperceptions of other states' policy options, but rather a product of changes at the international systemic level. Given the premise, it is now vital for state Copyright 2003 by Taylor & Francis Books, Inc.

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leaders and policymakers in the East Asia and Pacific region to consider the evolving structural framework of the Sino-American-Japanese relationship in the search for viable foreign policy options. SUBORDINAT~ONAND

AUTONOMYIN ALLIANCE POLITICS

This study has focused on the triangular relationship among China, the United States, and Japan in the early 1970's. The emergence of regional multipolarity in East Asia drove Japanese foreign policy in the direction of greater autonomy, as opposed to its traditional postwar subordination to United States foreign policy objectives during the bipolar system of the Cold War. This study assessed the implications of structural factors, and concluded that greater Japanese autonomy will serve its interests better than subordination to the United States. Although subordination and autonomy have literally opposite meanings, alliance policy-making may well fall somewhere on the spectrum between those two extremes. That is not always the case, however, if the international configuration is bipolar. There, state A's pursuit of autonomy implies dissociation from the allied relationship with state B, and thus subordination and autonomy in such a scenario are mutually exclusive. On the contrary, in a multipolar world, the two goals are less contradictory. A can cultivate ties with states other than its partners (for example, state C), with the premise that the alliance is loosened a bit. Hasty overtures toward such a new relationship, however, have the possibility of providing B with the unintended fear of abandonment, because B is concerned about the establishment of stable relations between A and C. Changes at the systemic level sometimes have a greater impact on other allies than what the ally might have originally anticipated. Second, given the compatibility of pursuing a mixture of subordination and autonomy in a multipolar world, it is necessary to assess the extent to which autonomy is possible as a foreign policy option. For example, when the fear of entrapment is predominant, a state will cultivate new ties with states outside the alliance. The fear of abandonment, by contrast, will drive a state closer to its protector, unless the state identifies alternatives that reduce its own reliance on the ally. However, although the "alliance dilemma" can be sometimes allayed by cultivating ties with other states, it is logically impossible to remove both fears until the allied relationship ends. Moreover, the end of an alliance, or the fear of the possibility thereof, brings with it the fear of abandonment for allies. Thus, as long as both states feel that they enjoy some benefits from the alliance, cultivating new ties with other states can be a costly enterprise. The above perspectives stemming from the change in the international systemic structure can be applied to both the early 1970's and today's postCold War period. By applying the theoretical arguments to a historical

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Conclusion

case, this study has gone a step further t h a n documenting a n important case in Cold War diplomatic history. Unlike the European countries which have experienced the incentives a n d constraints of alliance relationships since the nineteenth century, Japan has h a d alliances only with three states: Britain in 1902-22, Germany in 1936-45, a n d the United States since 1951. In order for the Japanese government t o fully understand the range-positive a n d negative-of the postwar U.S.-Japan alliance, it may be hoped that future studies pursue further h o w the structural dynamics interact with more widely understood sources of foreign policy-making.

NOTES 'Herman Kahn, The Emerging Japanese Superstate (Englewood Cliffs: PrenticeHall, 19701, p. 11. 2Zbigniew Brzezinski, The Fragile Blossom: Crisis and Change in Japan (New York: Harper and Row, 19721, pp. 108-9. In Premier Sato's diaries, there is a part in \vhich Sato persuaded Brzezinslti, a professor at Columbia University at that time, that Japan would never be nuclear in the future. Eisaltu Sato, Sato Eisaku Nikki (The Diaries of Eisaku Sato), Volume 4 (Tokyo: Asahi Shimbun, 1997), p. 320. 3IG.mneth N. Waltz, "The Emerging Structure of International Politics," International Security, Vol. 18, No. 2 (Fall, 1993),p. 66. 4Richard Bernstein and Ross H. Munro, The Coming Conflict with China (New Yorlt: Alfred A. Knopf, 1997). Regarding the latter argument, see Joseph S. Nye, Jc, "The Case for Deep Engagement," Foreign Affairs, Vol. 74, No. 4 (JulyIAugust, 1995), pp. 90-102; Yoichi Funabashi, Asia Pacific Fusion: Japan's Role in APEC (Washington DC: Institute for International Economics, 1995). jJack Snyder and Robert Jervis (eds.), Coping with Complexity in International S y t e m (Boulder: Westview Press, 1993), p. 5.

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