223. Your 204.
Japan and G.A.T.T.
Chadwick the British Economic Counsellor spoke on the telephone to Yukawa about his reported statement. 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.