140 Record Of Conversation By Brennan

28th May, 1956

CANBERRA

The Ambassador [1] handed to Mr Tange, a Note from the Embassy indicating Japan's willingness to enter into negotiations with Australia, looking towards a trade agreement and another Note covering drafts of agreements between Japan and Australia on (i) Entry, Stay, Travelling and Residence, (ii) Business Activities and (iii) Treatment of Ships.

The Ambassador explained that because of trade and payments negotiations pending with United Kingdom, it would not be possible for Japan to begin trade negotiations at the end of August, 1956, as had been suggested in our note of 25th May, 1956. He added that Japan hoped that Australia would be in a position to reply to questions on the following matters raised during the informal trade talks between Japanese and Australian officials:

(i) The application of GATT to trade relations between Japan and Australia;

(ii) Discriminatory restrictions on imports from Japan (import licensing and tariff duties).

The Secretary thanked the Ambassador. He said that the Minister for Trade had agreed to the alterations in the press release proposed by Japan. [2] He enquired whether the deletion of the word 'formal' from the press release, coupled with the request for replies to the matters referred to by the Ambassador, should be taken as an indication that, unless satisfactory replies were received on those matters, there would be no 'formal' trade talks.

Mr Suzuki said that this was not the intention of the note.

Mr Tange enquired whether the Japanese Government was insistent that trade talks and discussion of the 'treaty matters', (i.e. the matters dealt with in the second Note) should be combined. Mr Suzuki said that the Japanese Government would have preferred this, but realised that it might not be possible. The Secretary reminded the Ambassador that discussion of the treaty matters brought forward by the Ambassador would be complicated because of Australia's Federal Constitution and the absence of precedents, and would undoubtedly be prolonged. On the Australian side we thought that the trade matters could and should be separated from the others. However, we would make it clear to other Departments involved that the Japanese Government was anxious to see some progress in the discussion of the treaty matters. Discussions of trade matters and treaty matters might perhaps proceed side by side. Mr Suzuki indicated that this would be acceptable to the Japanese Government. He confirmed that, in consideration of the treaty matters listed in its 'initial statement' of 25th October, 1955 [3], Japan wanted preference given to the three matters dealt with in the second of the two Notes which he had just handed to the Secretary.

The Secretary said he thought the Department of Trade was not yet in a position to reveal Australia's attitude on import licensing and tariff duties. But the Government, knowing Japan's views, had decided that there was scope for trade negotiation between Japan and Australia. He asked whether the note implied that Japan wanted answers to its earlier questions before submitting requests. The Ambassador did not reply directly, but indicated Japan's anxiety to have the answers as soon as possible.

Mr Tange said he could not say how the Department of Trade, which would bear the main responsibility for the trade discussions, would want to conduct them.

The Ambassador said that Japan would like if possible some further indications whether the Australian Government would be ready to negotiate on the treaty matters and the trade matters raised by Japan when negotiations began. The Secretary said that we would pass the Embassy's Notes and this comment to the relevant Departments. It might be that the Australian authorities would want to wait until they reached the Conference table before discussing concessions to Japanese requests.

1 Suzuki was accompanied by Uyama; Tange and Brennan were the only DEA officers present.

2 The draft press release had begun: 'Formal trade negotiations with Japan are likely to begin shortly. . The Japanese Embassy requested deletion of the first word, and also of the second sentence, which had read: 'These negotiations would follow recent informal trade talks and earlier requests by Japan, said the Minister.' 3 Document 119. The discrepancy in date may reflect a gap between the note's preparation and delivery.

[AA : A2051/4, S0013, i]