107 Cablegram From Walker To Department Of External Affairs

29th July, 1955

TOKYO

223. Your 204.

Japan and G.A.T.T.

Chadwick the British Economic Counsellor spoke on the telephone to Yukawa about his reported statement.[1] According to Yukawa he had answered questions in the Diet Foreign Affairs Committee which was considering the bill for accession to G.A.T.T. and which wished to know what steps could be taken by Japan against discriminatory treatment on the part of those G.A.T.T. members that invoked Article 35. After the Diet Committee he had been approached by the press and had held a press conference on which he repeated the substance of the replies he had given to the Diet Committee. His statement was therefore intended for home consumption.

2. There is little doubt of the attitude that the Government is likely to adopt. Yukawa explained to Chadwick that when Japan is admitted to G.A.T.T. she will apply the tariff rates agreed at Geneva to all contracting parties except those who invoke Article 35 and to the latter Japan will continue to apply the existing tariff rates. Consequently there will be in effect a double column tariff. In addition there is the possibility so far as the present tariff law is concerned of establishing even a third column of still higher duties against countries that discriminate against Japanese goods. Yukawa agreed that Japan must continue most- favoured-nation treatment to the United Kingdom until April, 1956, but said that after that date Japan would be free to apply discrimination if circumstances warranted such a policy.

3. I have not thought it expedient to approach Yukawa myself unless instructions are received to do so.

1 Cablegram 220 from Tokyo on 27 July reported a press conference at which Morio Yukawa, Director of the Economic Bureau of the Japanese Foreign Ministry, predicted retaliation including higher tariffs and tougher trade negotiations against countries invoking Article XXXV. On file AA : A462/20, 602/2, iv.

108 MEMORANDUM FROM DEPARTMENT OF EXTERNAL AFFAIRS TO DEPARTMENTS Canberra, 5 August 1955

Trade with Japan Attached is a record of conversation with the Japanese Ambassador on 4th August together with the aide memoire referred to therein.

Although we were careful not to make a commitment to commence trade talks on 23rd August, we consider that every effort should be made to commence the talks then or very shortly thereafter.

With this in view it is suggested that there should be a meeting of Departments concerned next week to discuss such questions as what Australia would seek in bilateral trade talks, what we could agree to do for Japan and what Ministerial guidance would be necessary before talks commenced. We would be glad, if generally desired, to arrange for these interdepartmental discussions to be held in the Department of External Affairs.

Copies of this memorandum have been sent to the Departments of Commerce and Agriculture, Trade and Customs, National Development, Prime Minister's and the Treasury.

Attachment RECORD OF CONVERSATION WITH MR SUZUKI, JAPANESE AMBASSADOR AND MR YAMAMOTO, OF THE JAPANESE EMBASSY 4 August 1955 OFFICERS PRESENT Mr Patrick Shaw; Mr G. N. Upton MAIN TOPICS (1) TRADE TALKS WITH JAPAN (2) ACCESSION OF JAPAN TO GATT

Trade Talks With Japan Mr Suzuki handed over an aide memoire (copy attached) [1] to the effect that Japan wished to commence informal trade talks as suggested by Australia, in Canberra, around 23rd August, 1955.

Mr Shaw said that he would bring this proposal to the attention of Departments concerned without delay. He thought there might be some difficulty in commencing talks that week as the Budget would probably be brought down then and some of the officials most concerned might not be available. However, he hoped that arrangements could be made to commence the talks shortly thereafter. Mr Suzuki said that a week or so later than the date proposed would be satisfactory.

Mr Shaw enquired whether Japan had any specific problems to raise.

Mr Suzuki said there would be a number of questions but he had not yet received final instructions. Tariffs and the establishment of Japanese business branches in Australia would probably be included. He said that it was not proposed to bring officials from Japan for the talks.

Accession of Japan to GATT Mr Suzuki referred to recent conversations Mr Kakitsubo had had on this matter with Mr Shaw and Mr Plimsoll [2] and said that Japan hoped Australia would vote in favour of the decision without reservation. He especially emphasised that the Japan Government would be grateful for our announcement being delayed until 10th September or as long as possible if we decided to invoke Article XXXV. In making this request he referred to New Zealand's agreement to delay an announcement as long as circumstances

permitted and the suggestion of the Executive Secretary of GATT that Governments should not state their individual positions until 10th September.

Mr Shaw said that Mr Suzuki's representations on these points could be brought to the attention of the Minister and that the Minister would advise him on 10th August of the Australian Government's decisions. He said that Australia was anxious to help Japan to trade with countries of the Western world. On the question of delaying a possible Australian announcement about our position, Mr Shaw said that there were strong domestic pressures which had to be taken into account. It was likely that the Government would be under pressure to announce its position as soon as it became known that Japan had been admitted to GATT.

[AA : A1838/283, 759/1/7, ii]

1 Not published.

2 See Document 104. Kakitsubo also saw Plimsoll on 21 July, and Shaw on 28 July. Shaw asked whether the statement by Yukawa (see Document 107) should be taken as an official Japanese Government statement, whereupon Kakitsubo replied that whatever had been said was to be regarded in the context of cross-questioning by a Diet committee. Records of both conversations are on file AA : A462/20, 602/2, iv.

[AA : A1838/283, 759/1/7, ii]