TOKYO

Trade Negotiations with Japan
I have only just seen Stuart's telegram. 389 of 21st November [1]
and feel bound to make certain comments.

2. Kono's power. In my opinion the estimate of Kono's power given
in the telegram is somewhat exaggerated. My view is based
primarily on the following summary of the American record of the
conversation between Allison [2] and Kishi on 30th August 1956.

Begins:

'Kishi said that the Federation of Economic Organisations and
Japan Management Association were almost unanimous in the view
that Hatoyama should retire and that Kishi should become Prime
Minister. But they were afraid of Kono and insisted that if Kishi
became Prime Minister he should break with Kono. There were two
big mistakes of judgment here. Kono was able, young and a
politician with a future. He was no worse than the average
Japanese politician and in addition he was capable. Business firms
believed that Kono was evil from head to toe. In fact though not a
model of perfection or of political morality, Kono was not as bad
as this. Again, business interests overestimated Kono's strength-
they thought he could do anything he wanted. This was not so. His
power came from two sources namely:

(a) Bukichi Miki (now dead) [3] and
(b) Hatoyama.

Much of Miki's influence had now passed. If Hatoyama retired much
more of Kono's strength would go. Though Kono was a strong man and
had influence in the party he was not all-powerful. He was nowhere
near the man Kishi's younger brother, Eisaku Sato, or the Yoshida
faction's Hayato Ikeda was.' Ends.

(The above information and source should not be quoted anywhere).

It is true that the present power of Kono may for some purposes be
temporarily somewhat greater than that indicated above. While
individuals are competing for the Prime Ministership Kono's
support may be valuable. Nevertheless the latest press reports
suggest that Kono has committed himself to support Kishi. If so I
do not see why other contenders for the Prime Ministership such as
Ishibashi should be fearful of 'tangling with Kono': Indeed it is
arguable they might wish to clash with him if for instance his
influence is the sole obstacle to the granting of reasonable
Australian requests.

3. I agree with the suggestion that everything possible should be
done to 'work on' Takasaki while in Australia. In my memorandum
917 of 1st November I recommended that Ministerial attention
should be given to Takasaki while in Australia in view of the
importance of his position here. [4] There is now an additional
argument for this.

4. Again I would suggest that Suzuki be called in and asked to
bring his influence to bear on the Foreign Office with a view to
strengthening their hand against Kono.

5. While I am not in a position to express any firm opinion on the
desirability or otherwise of an 'adjournment' as distinct from a
temporary breakdown in the negotiations I put forward the
following points for consideration in Canberra. From the political
point of view a temporary breakdown need not be disadvantageous.

If, as I believe, our offers and requests are reasonable and if
the real cause of the breakdown can somehow or other be made known
not only officially but also publicly in Japan we can scarcely be
charged with causing the breakdown; while the breakdown itself may
possibly diminish Kono's influence in future. But political
effects must presumably be considered together with economic
effects which I am not in a position to evaluate. If the
Department of Trade estimates that adjournment, as distinct from
temporary breakdown, would secure for Australia certain economic
advantages this would be an important argument for adjournment. On
the other hand you may judge that adjournment may give undesirable
'cover' to Kono and facilitate agreement by Japan to accept
American wheat etc. It is conceivable to me that the Japanese may
be bluffing, at least as regards wool and would take the amount we
desire even though temporary breakdown occurred.

6. Finally I suggest we should be reluctant to adopt any policy
based upon assumption that one Japanese Cabinet Minister for
personal reasons can override the considered opinion of all the
other relevant Ministers and Officials based upon their estimate
of Japanese National interests. [5]