1. The Japanese Embassy has taken note of the statements made by the Australian Delegation at the Conference held on 5th October concerning the particular problem of finding adequate assurances for protection of Australian industry and for her stable pattern of trade, which might arise in case the Japanese goods were accorded most-favoured-nation tariff treatment, and import licensing treatment no less favourable than that accorded to other non-dollar goods.  It has also considered the questions posed in paragraph 13 of the Australian Delegation's paper on the possible steps to be taken by the two Governments to ensure that undue disruption to Australian production or Australia's pattern of foreign trade will be avoided, even in exceptional circumstances.
2. The views as expressed by the Australian Delegation seem to differ from those entertained by the Japanese side with regard to the possibility of imports from Japan causing such a serious disruption in this country.
However, in order to meet the Australian requests as far as practicable, the Japanese Government is studying the steps which might be taken to avoid the occurrence of an unduly disturbing situation in the Australian market.
In this connection, the Japanese side will be pleased to hear from the Australian Delegation as to whether, in case the Japanese authorities undertake to take those steps that are satisfactory to the Australian Government, the latter would be prepared to give all kinds of imports from Japan such treatment as stated paragraph 1 above, and also to cease to invoke Article XXXV of the G.A.T.T.
in regard to trade with Japan.
3. As a step to be taken by the Japanese side with a view to attaining the objectives mentioned above, it might be possible to have control measures taken by Japanese exporters at their own initiative, such as adopted in respect of the exportation of cotton textiles to the United states and Canada.
It is to be added, however, that the abovementioned steps are being taken in consideration of the fact that no import restrictions are imposed in these countries. Even if the Reserved List is abolished, therefore, due account needs to be taken of the different circumstances which exist in Australia where foreign exchange and import restrictions would likely be continued because of her balance of international payments position at least for the time being.
In case the statements as expressed above were found unsatisfactory, the Australian Delegation is requested to indicate as to what kind of assurances, for example, the Australian Delegation would desire to have from the Japanese Government, and what kind of commodities with regard to which such assurances are required.
4. Furthermore, it would be appreciated if the Australian Delegation would be good enough to elucidate, with regard to each particular commodity involved, on- (a) For what reasons the Australian Government requires such assurances;
(b) The effects to be anticipated as a result of its removal from the Reserve List or of application of most-favoured-nation tariff to it.
5. With regard to the second question raised in the aforesaid paragraph 13 of the Australian paper, concerning the possible measures open to Australia, within the commitments requested by Japan on tariffs and import licensing, to ensure the attainment of the necessary objectives, the Japanese side would like to enquire, before it makes any comments, about the kind of situation under which the Australian Delegation would decide that undue disruption has arisen to Australian industry or Australia's pattern of foreign trade.
Would it be possible for the Australian Delegation to express its views on the above question by citing the percentage in the total Australian imports, for example, which, if reached by imports from Japan, the Australian authorities would regard as harmful?
6. Lastly, the Japanese side would be glad to be given detailed accounts as to the measures, if any, which the Australian Government is contemplating to take with a view to ensuring that the abovementioned objectives can be achieved.