417 Department of External Affairs to Embassy in Washington

Cablegram 628 CANBERRA, 2 June 1947, 2 p.m.

SECRET

Your 669. Quotas of Businessmen to enter Japan.

You should press strongly for substantial increase of the Australian quota on the following grounds:

(a) 1935-36, the base year used for arriving at other countries quotas, should be used for Australia also.

(b) Germany's quota should be allocated among all countries and not only the three who already have the largest quotas.

(c) The quotas of non-FEC countries should be reduced by at least 5% in order:

(i) To give greater recognition to the contribution FEC members have made to the defeat of Japan.

(ii) To make allowance for the opportunities enjoyed by non-FEC members as neutrals during the Japanese war.

(d) Those FEC countries with a substantial interest in Japanese trade (such as Australia) should have a quota which will enable them to conduct at least essential preparations. (This would not be so with an Australian quota of 4% of a total estimated entry of 300 businessmen.) On the other hand it cannot be reasonably argued that percentage of trade should decide the proportionate representation required to re-establish that trade.

(e) Australia is the only country in eastern Pacific area with a substantial interest in the supply of both raw materials and manufactured goods to the Orient.

(f) Australia looks to substantial development of two-way postwar trade with Japan and may be expected, from her geographical position, to look to Japan as a natural market and supply centre.

On these grounds you should press for a quota of 12% reducing this if necessary through pressure or for purpose of manoeuvre to 10%.

For your additional background information, Cabinet agreed last Monday that, notwithstanding our insistence on Peace Conference decision on date and conditions of resumption of Japanese trade, detailed preparations for resumption should be undertaken immediately and advantage should be taken of any decision to resume private trade whether the decision is made by the Peace Conference or otherwise. It was also decided that the matter should be referred back to Cabinet before trade is commenced.

Detailed preparations are now proceeding. You will understand, however, that our policy of firm insistence on Peace Conference decision remains unaltered.

[AA: Am1068 ER47/31/14, i]