6/13/75

# THE U.S. AND JAPAN IN A CHANGING WORLD

Vast and complex changes are now transforming the international scene. A firm relationship between Japan and America is crucial if we are to successfully encounter these forces and help to build a new global structure for stability and progress.

America's ties with Japan are encouragingly strong, close, and full of promise. The vital significance we attach to these relations will I trust be evident in what I have to say here -- and indeed in the fact that this is the first time I have devoted a speech to America's relations with a single country.

Tonight I want to discuss the importance of the U.S.-Japan relationship -- for America, for Asia and the world -- and the insistent agenda for action now before us.

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With the end of the decade of the 60's came the recognition
that momentous new forces were transforming the international
order. The postwar period, with its relative simplicity, had
come to an end.

Since that time the aim of American policy has been to
help shape the forces of change. If we understood our own
purposes, we could do more than react to onrushing events;
we could help build a new structure of global stability and
cooperation. We could engage other nations in bringing about
a new era of peace, prosperity and justice for all the
peoples of the world.

Against this background, this occasion tonight comes as
a welcome opportunity. For the collapse of an independent
South Vietnam, which we had made a major effort to preserve,

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has led many people -- including Americans -- to a new
questioning of America's foreign policy. But I believe the
last several weeks have also brought a healthy recognition
that our participation in the world is not something to be
taken for granted. The greatest irony of the tragedy of
Indochina is the recognition it has brought that a strong and
purposeful America is essential to peace and stability.

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Compared to the moral, political, and military certainties
of the Cold War period, we now have entered a world of
unparalleled complexity. Today the international scene is marked
by multiple centers of power, by ideological differences both old
and new, by the threat of nuclear devastation, and by the new
imperatives of interdependence. These factors in various
combinations and at different times induce confrontation yet
impel us to cooperate.

The bipolar world of the 1950's and 1960's has disappeared.
Rivalry between the communist powers, the reemergence of
Europe and Japan, the rise and increasing diversity of what
once was known as the "Third World" has created a world of
diffuse, fragmented authority and often contending centers of

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power. This means the United States can no longer
predominate. But it means as well that our role as a
resolute influence for stability and progress is more
vital than ever before.

But the passing of the bipolar Cold War era has not brought
an end to ideological differences. The divergent values and
aspirations of the industrial democracies and the communist
world are unlikely to disappear in the foreseeable future.

At the same time, disagreements between the industrial
and the developing nations over economic, political, and
moral issues are increasing. The United States is prepared
to rationalize its relations with old adversaries and to build

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for a new cooperative era between the developed and the
developing countries. But we are determined not to yield
to pressure or threat. We will defend the values and
principles which provide the moral foundation for the great
industrial democracies, our friends and allies.

Our efforts for international accommodation are con-
ducted today against a background of threatened nuclear
destruction. Cooperative attempts to control the expansion
and proliferation of nuclear arms is more urgent than ever.

The United States is committed to pursue the policy of
detente to enable the great powers to adjust their differences
on a more rational and mutually beneficial basis.

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We have no illusions, recognizing that our values and social systems will not soon, if ever, be compatible with those of the communist powers. Detente is not a substitute for American strength. In our time there can be no con-ciliation without strength, and to exercise strength without conciliation is fraught with peril. Without detente there can be no hope for true stability or peace, and even the con-tinued existence of mankind is in doubt.

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also

The imperatives of interdependence are/imposing change on the international community. The newly evident dependence of consumer nations on producers for raw materials; and of producers on consumers for markets and technology make mutually beneficial and cooperative arrangements necessary. The global problems of population, food, health, environment, the use of the oceans and the atmosphere cannot be solved without new achievements in international cooperation.

These then are the forces for change we must face.

To meet them, we seek to help build a new international

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structure in which every nation is a participant and which
every nation has a stake in maintaining -- a nascent world
community in which conflicting interests are accommodated
and common interests pursued. With this vision we have
aimed at a foreign policy that is not a series of improvised
responses to crisis, but a design that embraces the realities
of the present and our hopes for the future.

The U.S. - Japan Relationship: the hinge of success

The relationship between the United States and Japan
is crucial to this design. It forms the keystone of our Asian
policy. Indeed, it is central to the continued progress and
prosperity of the international community. The values,
experience, interests and capabilities we share make us
natural partners. Our economic, political and strategic
interdependence with Japan is inescapable.

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A common concern for peace in Northeast Asia has led to our indispensable mutual security arrangements. As maritime trading nations with complementary economies, we have developed the largest bilateral overseas commerce in history. As major industrial powers our respective economic policies profoundly affect each other. As open societies we are committed to democratic procedures and the preservation of basic human values as we search for solutions to the problems of a rapidly changing world.

In his first trip abroad as Head of State, President Ford visited Japan to consult on the great issues of our time. It is with anticipation that we await the visit of the Emperor, whose presence here will symbolize the ties

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between us. And before the Emperor's arrival, Prime
Minister Miki will come to Washington to discuss the
common objectives of our two countries.

I cannot refer to this series of consultations between
friends without paying tribute to the late former Prime
Minister Eisaku Sato, whose dedication to the shared goals
of our two countries was unsurpassed. He was a good friend
to America, and his friendship and wise counsel meant much
to me.

America's interest in the relationship between the United
States and Japan is equal to our interest in our Atlantic
alliance. We do not choose between our partners; indeed,
we cannot, for progress is indivisible. The problems,

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policies, challenges and opportunities of this new global era
are intertwined. In this age of analysis, focus on an issue often
leads to neglect for its context. But our world is at once
fragmented and interdependent. Each part affects, and is affected
by, the whole. There can be no U.S. policy toward Japan unrelated
to Asia and the world.

It is perhaps a measure of the strong support for our
relationship that some in this country suggest we make Japan the
sole American concern in the Far East. Yet the linkages that bind
Japan to Asia are no less important than those binding it to us
and other advanced nations of the West. Any policy running
counter to this fact cannot possibly succeed.

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The future character of American-Japanese relations depends
in part upon the maintenance of a broad equilibrium in Asia.

That equilibrium depends upon several equally important factors:

policies of restraint and moderation by the Soviets and Chinese;

the effective management of internal affairs by the small non-

Communist states; an acceptance of the principles of peaceful
coexistence throughout the area; and the willingness of various
influential middle powers to play constructive regional roles.

And crucially, it requires an American presence in Asia, not
merely in Japan.

Let me therefore briefly mention the American stake in
Asia, and the principles of our Asian policy.

## The United States and Asia

Over the course of the modern age, America's security,
prosperity and cultural vitality have become inextricably
bound up with Asia.

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The security interests of four of the five great world powers intersect in Asia -- particularly in Northeast Asia. China comprises the heartland of the continent. The Soviet Far Eastern lands spread across the top of Asia. The Japanese islands span 2000 miles of ocean off the Asian mainland. And America's Pacific presence affects every region of Asia. The ways these powers interact will determine the stability of Asia and the world.

Asia holds an immense share of the world's population and resources. In the last few decades it has experienced a spectacular growth of economic power and national development. America has been commercially involved with Asia since the birth of our nation. And since the Second

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World War our involvement in efforts to promote mutual
prosperity have deepened enormously. We have a vital interest
in access to Asia's raw materials as Asia has to our markets
and technology. A stable international economic order could not
survive the disengagement of these two major areas of the
world.

And the ties between Asia and America have their
inescapable human dimension. The social impact of America
and the West over the past 100 years helped transform Asia
across the broadest range of human activity. And Asia has
significantly influenced American intellectual like since the time
of the New England transcendentalists. Our cultural and family
ties have grown enormously in the past thirty years. The U.S.
must maintain and develop its understanding of the diverse,
extremely rich and dynamic cultures of Asia. Indeed,

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it is only through improving understanding of the values and aspirations we share that progress will be possible on the great human issues of environment, health, population and peace for all peoples. Asia will figure importantly in our thoughts and policy calculations as far ahead as we can see.

Thus, the cardinal principles of America's global policy design are sharply delineated in Asia:

- In a world of increasingly diffuse power, the U.S. position as an anchor of stability in Asia is vital.

We will keep our treaty commitments. Those allies who seek our support will find us a firm friend. At the same time we will continue to look to our partners to assume the management of their own national destinies and primary responsibility for providing the manpower their defense

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requires. But we are not wedded to the status quo.

We will not insist on maintaining current arrangements if
our partners seek to modify them. The U.S. in any event
will continue to protect its vital security interests whenever
and wherever they are challenged.

In this regard, we are resolved to maintain peace on
the Korean peninsula and will continue to seek ways to
reduce confrontation there. At the same time we will
further assist South Korea to strengthen her economy and
defense, recognizing that true security must rest on a
broad base of political acceptance and social justice.

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-- In a world of continued ideological confrontation, the United States will resolutely defend its values and interests.

America's policy is to look first to our friends and allies -- those with whom we share values, capabilities, experience and aspirations -- the great industrial democracies of the world.

Together we are prepared to rationalize our relations with old adversaries and to build for a new cooperative era between the developed and the developing countries. In these efforts we are determined not to yield to pressure or threat and to defend the values and principles which have made our societies what they are today.

-- In a world threatened by nuclear devastation, the U.S., in consultation with our Asian friends, will continue to work to reduce the danger of war and lessen international tensions.

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We are committed to the policy of detente with the
Soviet Union.

And we will continue our effort to normalize relations
with the People's Republic of China in the spirit of the
Shanghai Communique.

We have no illusions, recognizing that our values and
social systems will not soon, if ever, be compatible with
those of the communist powers. But without this effort
there can be no hope for true stability and peace, and even
the continued existence of mankind is in doubt. We must
remember that there can be no conciliation without strength,
and to exercise strength without conciliation is fraught
with peril.

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As for the new regimes in the region, we cannot ignore
the fact that they have flagrantly violated international
agreements and the accepted standards of international
conduct. But we are ready to look to the future. Our
attitude toward bilateral relations with these regimes will
be influenced by their regional conduct and their attitude
toward us.

-- In a world of economic interdependence, the U.S.
will continue to be a reliable partner for economic progress
on a bilateral and on a regional basis. Durable international
stability cannot be achieved unless the material needs of the
world's people are met. While the key to sustained progress
lies in what nations do for themselves, the U.S. will continue
to bear its fair share of responsibility for the economic
development of our friends and allies in Asia.

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These, then, are the principles which will guide America's
actions in the world and in Asia. We regard the U.S.-Japan
relationship as central to this design.

- Deep historical and social foundations underlie
our firm bilateral ties; and

- these ties are crucial for Asian stability, global
prosperity and for the urgent agenda which lies
before us.

## The Foundations of Our Partnership

Relations between the United States and Japan go deep
into the history of the modern era. In the course of the
last century and a quarter, our relations with Japan have

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encompassed phases of friendly competition, rivalry,
conflict, occupation, reconciliation, and now alliance
and mutual dependence.

Our long and varied association has taught us that
close partnership is possible between countries whose
national styles and situations differ widely.

Indeed, we have achieved remarkable appreciation and
understanding of our cultural and social differences. We
Americans are a disparate people, heterogeneous in our
origins, constantly striving to redefine what we have in
common. Japan is a country of unusual cohesiveness and
homogeneity.

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Our social systems differ widely. For Americans,
contracts and laws are a prime guarantor of social peace.

The Japanese depend less on legal and formal rules than
on the warmth of human relationships and unstated patterns of
consensus and obligation to preserve social harmony.

Our language is designed for categorization. It invites
logical distinctions and value judgments. The Japanese
have experienced so much in common that they frequently
communicate through intuition and indirection. The Japanese
prize form and mood, as well as content; we honor content
above all, frequently neglecting its setting and form.

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We are endowed with abundant land, ample resources
and high technology. Affluence is taken for granted. Japan
is a great world industrial power; but its prosperity, more
recently attained, seems more vulnerable because of its
extensive dependence on imported food, energy and other
raw materials, and external markets for its great industry.

In foreign policy we have assumed global security
responsibilities. The Japanese have emphasized
economic strength and commercial success while foreswearing
large military forces or assertive diplomatic conduct.

True communication between cultures is at best a
compromise. But despite past misunderstandings the U.S.
and Japan have achieved a remarkable sensitivity, indeed
fascination, with our national differences. And our under-

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standing has led to important decisions, such as America's
postwar determinations on the unity of the Japanese nation
and the role of the Imperial family -- both in recognition of
the expressed desires of the Japanese people. The most
durable international relationships may be those forged
through long effort by peoples of different circumstances
pursuing converging aims with understanding and goodwill.

The recent history of U.S.-Japan relationship bears this
out. Our alliance was formed in the period of Japanese
dependence. War had shattered her economy, political
system and national confidence. Japan accepted American
leadership and only gradually came to take part in inter-
national diplomacy.

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Japan's dramatic emergence as a major economic power
and factor on the international scene brought a swift evolution
of our relations. Today we approach our mutual problems as
full and equal partners.

We have devised channels for more intensive consultation
and have used them with growing frequency and frankness.

The reversion of Okinawa in 1971 removed the last major
vestige of war from our bilateral agenda. But in that same
year differences arose between our two countries when the
U.S. initiative toward the People's Republic of China and
economic steps in response to trade problems and a deterior-
ating U.S. payments balance disquieted our relationship.

These problems are now behind us and we are moving forward
in both areas along mutually compatible lines.

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We have made progress toward solving the trade imbalance
and have reaffirmed our specific commitments as suppliers and
purchasers of important goods and materials. We have broadened
our concept of security to include our mutual need for reliable
access to energy, raw materials and foodstuffs.

Today our bilateral ties are stronger than ever; indeed they
have become a model of positive and productive international
relations between equals. With this firm foundation, we have
become able to address the great international issues of peace
and prosperity with greater confidence.

## The Challenge of Peace and Security

Japan plays a unique role in the endeavor to maintain a
peaceful world. Since the end of the Second World War, Japan
has been conducting an historical experiment: despite its industrial
prowess it has foresworn the military attributes of great

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power status, relying for its security substantially on the
support of the United States, [and the good will of others,]
limiting itself to modest conventional self defense forces.

Note:

Miyazawa
language

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This experiment, which some Japanese regard more
a matter of necessity than of choice, has brought signifi-
cant and tangible returns. Japan's market economy has
achieved unparalleled growth. Parliamentary democracy
and individual freedom are now firmly established.

Japan has been able to concentrate its energies

on developing constructive economic and political relations

with its neighbors, thereby contributing to regional

stability and growth.

The success to date of this experiment owes much to
several factors. The U.S.-Japan Treaty of Mutual
Cooperation and Security has been and continues to be
widely acknowledged as an indispensable element of
peace and stability in Northeast Asia.

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In addition, Japan enjoyed through much of this period assured access to imported raw materials and food at reasonable prices. And its commitment to a democratic system and international economic cooperation simplified Japanese choices in the arena of world politics.

Most of all, success has come as a result of the Japanese peoples' hard work, prudent planning, and dedication to great ideals.

Since the oil crisis of 1973, this relatively simple universe appears to some Japanese to be in the process of disintegration. The clear cut choices of the Cold War period are yielding to a more complex interplay among the powers. Suppliers of raw materials are presenting a

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variety of new demands for power and participation not easily
accommodated within the context of the existing world trade
and monetary regimes.

These changing circumstances compel policy adjust-
ments on the part of Japan as well as the United States.

The continued success of the Japanese postwar experiment
in the face of these new complexities is a question in which
not only the Japanese but we as well as others possess
an important stake.

There are many encouraging signs. The commitment
of the Japanese people to a democratic social order appears
irreversible. Whatever legitimate concerns exist about the
adequacy of their self defense capabilities, few Japanese

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propose a return to a heavily armed state. However acute
their uncertainties may be about the future, Japanese
security concerns are focused on improving the chances for
peace in the surrounding area and in the world. The U.S.
shares these objectives and is pledged to consult and cooperate
with our Japanese friends toward their achievement.

Consistent with her constitutional and political principles --
which preclude an overseas military role -- Japan has long
been a factor, through her economic influence, in aiding the
efforts to nations desiring help in consolidating their own
nation-building efforts. Japan's growing economic strength
and influence lead us to look forward to an increasingly
positive and forthright Japanese role in bringing about a
more stable and peaceful Asia.

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The Challenge of the World Economy

In the past few years the world economy has come under great stress. An energy crisis, a food crisis, a global recession, a rate of inflation unprecedented in the postwar age, and the politicization of many economic transactions have severely strained the fabric of international cooperation. As two of the world's greatest economic powers, the response which the U.S. and Japan make to this situation will have a major effect -- not only of the future health of our own economies, but of the future prosperity of the world, with which our prosperity is inter-twined.

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V

Our nations are in the midst of the most serious economic crisis since the Great Depression of the Thirties. Our first task is to take decisive and coordinated economic policy actions to restore growth in our economies. Our cohesiveness and our relations with both the Communist world and the developing nations will be enhanced if we are economically strong and resilient. The survival of our international system and our national security cannot be assured in a world of economic stagnation and conflict.

Japan and the United States bear a special responsibility in helping the world back to a path of sustained economic expansion without inflation. Our economies are the world's largest. Together we account for 52 percent of the output and 26 percent of the trade of the non-Communist industrial world. If we do not grow, the economic problems of the rest of the world will be difficult to overcome.

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In a new development last winter, President Ford and
former Prime Minister Tanaka consulted on our efforts to
combat recession. We must continue to coordinate our
policies at all levels to ensure that we are working together,
rather than at cross-purposes, to alleviate recession and
unemployment.

But our prosperity cannot be maintained in the absence
of a comprehensive, cooperative approach by all nations
to address the practical common concerns of all humanity.
An international system will be stable and progressive only
so long as its economic benefits are widely shared
and its arrangements perceived

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as just. To this end the United States welcomes the pro-
posal of the Japanese government to the OECD to examine
the long range development of advanced societies in
harmony with the less developed countries. With Japan's
cooperation we have already begun to chart new methods of
dealing with the key issues of energy, food, and commodities.

An Agenda for Action

As the relationship between the United States and Japan
has evolved from dependency to full equality, occasions have
arisen when the U.S. has acted with undue haste or insufficient
regard for the strengthening of our bilateral ties. Such short-
comings are not uncommon during periods of transition and
innovation. But the interests we share and the legacy of

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understanding we enjoy has resulted in the mature relationship
of full and equal partners we see today. Most important,
we have achieved a new and unshakable confidence that we will
go forward together to meet the challenges of the era before us.

The United States will not approach any multilateral issue or
attend any international conference involving our common
concerns without full consultation with our Japanese friends.

Consultation and collaboration between the U.S. and Japan
is central to progress not only in Asia, but on solving the great problems
of our time. The agenda before us is wide-ranging and urgent.

Let me suggest some of the issues we can address together:

-- We must seek a more stable equilibrium among the major powers in East Asia. We will sustain our commitment to the Treaty of Mutual Cooperation and Security while consulting on

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equitable sharing of the costs and benefits of this association.

This alliance is not a remnant of the cold war but a central pillar of a regional system in which the major powers have an acknowledged stake.

-- In energy the U.S. can aspire to relative self-sufficiency; Japan can merely diversify its sources of supply.

We will take account of Japanese vulnerabilities in designing our own energy policies.

Our efforts to reduce oil imports and to stimulate expanded domestic production should generate price and supply effects in the international petroleum market to benefit Japan as well as other major consuming nations. As major oil importers we share with Japan a necessity to intensify our endeavors

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to conserve scarce fuel, to expand the search for additional
sources of conventional fuels, and to use our capital,
technology, and management skills to develop the new, exotic
energy sources. In this regard, we are prepared to begin
a coordinated, large-scale energy research and development
effort with Japan.

In the future Japan will depend increasingly upon nuclear
energy. We have pioneered the development of uranium
enrichment processes. Japan has been our largest market
for enriched uranium exports. As Japan's fuel require-
ments expand, so, too, do our commercial opportunities
and our stake in demonstrating our reliability as a supplier.
We recognize our responsibility to continue providing

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nuclear fuel under long term contracts, and we will provide
attitional enrichment capacity to ensure adequate future
supplies. In this connection we welcome foreign investment
in the construction of additional facilities consistent with
discussions we have been holding with Japanese industry and
government.

-- Japan is our largest market for agricultural exports,
and we are Japan's largest supplier of *foodstuffs*. Thirty
percent of Japan's imports come from the United States.
We can take pride in our record as a reliable supplier, and
should a situation of limited supplies and tight markets
develop in the future we will take particular account of the
needs of traditional customers. We intend to avoid any

[Y]

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repetition of the unfortunate experience in 1973 when unilateral
restraints were introduced on the export of soybeans to Japan
and other countries. To improve our ability to meet Japanese
needs without excess inflationary pressure in our own market,
we must intensify our bilateral consultations on agricultural
supply and demand trends.

As large producers and consumers of agricultural goods,
we also bear important responsibilities for alleviating the
global problems of hunger. We must join with other major
manufacturers of fertilizers to expand production to meet
growing world demand. And as a hedge against the feast and
famine cycle of global harvests we must cooperate to
establish an international system of nationally-held grain
reserves by the end of this year.

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-- In the field of <u>commodity trade</u> we must work for a new era of cooperation between the industrialized and developing nations. We share with Japan an interest in alleviating drastic commodity price fluctuations which discourage timely investment in the development of new supplies. A world of supply uncertainty is a problem for all industrial countries, and security must rest on joint action and agreed rules. Our private sectors possess the capital, technology, and management services essential to the expansion of global raw materials production. Our two governments possess a common stake in promoting a healthy commodities trade which equitably serves the interests of producers and consumers alike.

-- In <u>trade</u>, we have a common interest in a broad reduction of industrial tariffs and the removal of many