AMBASSADOR OF THE STATES OF AMERICA TOKYO DECLASSIFIEU l November 14 1978 CONFIDENTIAL The Honorable Gerard Smith Ambassador at Large Department of State Washington D C 20520 Dear Gerry My reply to your note of October 23 has been delayed by my absence from Tokyo I am happy to address your questions There is absolutely no question about the fact that the U S policy on non-proliferation has had a wide Spread impact at all levels of Japanese political leadership and public opinion It has been expressed as questioning and concern by senior Government offi- cials the Diet in committee hearings and by individual members by the nuclear industry witness the many visitations to Washington and by the press Although the intensity of concern has died down during the past few months an undercurrent remains which indicates that the Japanese are still skeptical The skepticism is likely to increase as the INFCE and Tokai Mura agree- ments approach their end This is not to say that all has been bad The more moderate and reasonable approach taken by the U S starting with your entry into the Tokai Mura negotiations repeated assurances that we understand the Japanese energy situation and Secretary Schlesinger s strong posture of cooperation and support for Japan's nuclear programs have all acted to make the Japanese more understanding of our proliferation concerns Both Prime Minister Fukuda and Foreign Minister Sonoda showed their awareness of and a general spirit of cooperation with our policy in CONFIDENTIAL GDS CONFIDENTIAL 2 their conversations with Secretary Schlesinger for example Furthermore the Japanese have cooPerated fully with us in INFCE TASTEX IAEA meetings and London suppliers activities and are numbered among our reliable allies in such fora It is necessary that we continue to treat the Japanese as co-equals in nuclear policy matters and that we not revert to the heavy-handed approach already shown to be non productive or counter-productive We must also keep in mind always that there are other bilateral economic and political issues lying before us which are of great importance and the total context of the relation- ship requires continuous evaluation and balancing The new nonproliferation legislation unfortunately presents some potential for Opening up old wounds and causing us political difficulties It is too early to predict the extent and depth of these ramifications but I think that it is clear already that Japan will not want to get too far ahead of the EurOpean countries in acquiescing to the increased controls that the U S will place on the export and use of nuclear fuels plant components and technology I caution particularly against trying to impose controls on Japan which are not imposed equally on other advanced countries such as Germany even though some may argue that Germany -as a member of the European Community and Euratom has to be treated in somewhat different fashion I am thinking of Japan's imminent entry into the uranium enrichment field as an example but there are other possible difficulties as well Our position and that of Japan will become much more clear when we enter into the negotiations on the new bilateral nuclear c00peration agreement required by the Nonproliferation Act Retrospectively our negotiating position should take into account that Japan has acted in a completely responsible manner in its nuclear dealings with other countries it has not tried to go around COCOM rules or the London suppliers' guide- lines in making exports that we would look upon with disfavor as has been done by some of its European counterparts Authority QONFIDENTIAL 3 Of course the new legislation has had an immediate effect in Japan because of its applications to the 0 5 for approval of the export of spent fuel to the UK and France for reprocessing A problem which could have degenerated into a major political issue was averted by the skillful handling of the matter by the Administration My former colleagues in Congress were not quite as understanding witness the letters to the President from Senator Glenn and Congressman Bingham but reason prevailed The Japanese are fully aware of the fact that the approval they obtained was ad hoc and that as future shipments are scheduled they will have to repeat the rather embarrassing process of seeking U S approval each time I trust that the approvals already granted will form some sort of interim precedent so that Executive and Congressional reviews are not required for each prOposed transfer Taking a longer term perspective I am troubled by what may come later The Administration has made it clear that its approval for the transfer of spent fuel to Europe for reprocessing should not be construed as implying that it will automatically approve the return of separated plutonium to Japan At the same time the Administration insists that it is not interfering with the deveIOpment of fast breeder reactors in other countries Should the time come when the Japanese need the plutonium they own in Europe for their fast breeder program but are not permitted by the 0 3 to receive it we are going to become engaged in another major confronta- tion in my opinion There is a tendency in Washington I am sure to put off consideration of this issue because it lies several years ahead I think questions are going to arise earlier than that either from Japan or from other countries similarly affected we should be addressing how we will handle this situation with the major nuclear energy countries about whom we have no proliferation concerns we - - CONFIDENTIAL 4 Some of the other requirements of the new legislation that will be incorporated into revised bilateral agreements such as the requirement that U S approval be obtained for storage of certain classes of nuclear materials may cause difficulties with the Japanese but we have not heard enough yet to tell how much of a problem they will be Concerning Japanese attitudes toward the outcome of INFCE I believe that Japan will seek shelter in what- ever consensus develOps That is I don't believe that Japan will go so far toward meeting U S non proliferation concerns that it will isolate itself from the European consensus position This assumes that Eur0pe will continue to resist the full acceptance of U S proposed nonproliferation measures and that Japan will go along with the other major nuclear power nations so that it is not placed at a disadvantage in economic or strategic terms vis a-vis energy developments On the other hand Japan -as a major supporter of the INFCE program and a nation which wishes to continue close and cooperative relations with the 0 5 in this field will not take the lead in Opposing U S efforts I am some- what limited in my view of the INFCE activities since I cannot become familiar with the myriad of technical detail involved and since we receive relatively little information about 0 5 perceptions of country attitudes at INFCE meetings held in other parts of the world I do recall some cable traffic of a few weeks ago which appeared to reflect some heated reaction by other countries to efforts by the 0 5 to require proliferation resistance analyses in one of the working groups Although Japan also joined the negative side its position was not as adamant as that of some others The INFCE approach has both good and bad aspects From the good side it has increased the awareness of most countries of the proliferation problem and has given the U S a forum to express its position in great detail From the bad side there are indications that the CONFIDENTIAL DECLASSIFIEU Authority CONFIDENTIAL 5 results of INFCE may not be in the form of a consensus meeting U S needs or alternatively there may be no consensus at all on some facets of the problem The question then is what does the U S do next The future of the Tokai Mura plant hinges to some extent on the outcome of INFCE and I hope that you will be taking this into account over the course of the final year's deliberations on in the sense of giving Japan specially favorable consideration but in insuring that Japan as a non-nuclear weapons state and party to the NPT is not isolated by the U S for special treatment because it has a reprocessing plant and other nations of the same status do not In other wordS the political framework of the period should put Japan in the category of the UK France FRG and the United States as an advanced nation with heavy nuclear power interests To what extent this view can be factored into the ongoing INFCE process is known far better to you than to me My views above have been very frank and are largely in the perspective of the overall U S -Japan relationship What you could do for me in return is to give me an equally frank analysis of how we are doing in convincing other countries about the merits of our nonproliferation policy either bilaterally or in INFCE If we have a loser on our hands I would like to know about it early in the game If we are going to win I would like to know that too Nonproliferation policy will continue to be one of the most important issues we and Japan deal with and it retains a potential for political difficulty It is important to me to know where we stand and what our prospects are Sincerely - arm-                     National Security Archive    Suite 701  Gelman Library  The George Washington University    2130 H Street  NW  Washington  D C  20037    Phone  202 994‐7000  Fax  202 994‐7005  nsarchiv@gwu edu