48 Aide Memoire Presented By Nishi To Department Of External Affairs

14th January, 1954

Japanese Trade with Australia The Australian Wheat Board indicated last October that 200,000 tons of wheat was available for Japan for the current season, but in December last Japan declined to purchase, for lack of Sterling, when arrangements for the first shipment of the wheat were about to materialise.

In pre-war days Japan was a big buyer of Australian wool, wheat, etc. In thepost-war period Japan again increased her purchases of the same, and in July last Japan became the 'second best overseas customer' of Australia. But during the trade year ended 30 June last, the trade showed an abnormal unbalance of 82,942,000 in Australia's exports as against 4,693,000 in her imports from Japan.

We much appreciate the following statement which Sir Arthur Fadden, then Acting Prime Minister made on 3rd July, 1953, in introducing relaxation of import restrictions:

'Japan has been deficit with the Sterling area as a whole, her sterling reserves have fallen to a low level and there is a distinct danger that she may be forced to restrict her overseas buying even of raw materials, such as wool, and foodstuffs, such as barley. It is notable that during 1952-53 Japan was Australia's second best overseas customer. Therefore we have an important interest in the continued overseas buying capacity of that country.'

It is disappointing, however, to note in the trade statistics up to October last published by the Commonwealth Bureau of Census and Statistics that no noticeable improvement in Australia's import from Japan has taken place since the announcement of import relaxation in July last, to wit:-

Unit: A'000 f.o.b.

Import from Japan Export to Japan

1952 Jan. 6,452 6,558 Feb. 3,366 6,263 Mar. 2,495 4,754 Apr. 3,240 3,766 May 1,133 3,696 Jun. 2,539 3,130 Jul. 899 4,978 Aug. 493 4,819 Sep. 547 3,855 Oct. 397 6,552 Nov. 1,044 7,932 Dec. 282 6,646 1953 Jan. 148 9,004 Feb. 221 6,497 Mar. 259 8,941 Apr. 90 7,516 May 155 9,570 Jun. 158 6,632 Jul. 236 4,476 Aug. 214 4,455 Sep. 435 2,686 Oct. 279 4,053 July 1952 - June 1953 4,693 82,942 Nov. 1952 - Oct. 1953 3,521 78,408 July 1953 - Oct. 1953 1,164 15,670

Japan has been a large importer of primary products, i.e. wool, wheat, barley, etc., as she has to feed and clothe her vast population. For example, Japan imported in 1952 nearly 1.7 million tons of wheat from various sources, including 27,895 tons from Australia and 950,000 tons of barley including 69,820 tons from Australia. As a result of the failure of her rice crop last year Japan is expected to increase considerably her import of staple foods.

For lack of sterling, Japan has no choice but to make these food imports largely from non-sterling areas. Japan's import of Australian wool will also have to be cut drastically.

It is urgently requested that the Australian Government will see to it, in the interests of both countries, that further import relaxation on Japanese goods be effected as soon as possible so as to enable Japan to continue to be a good customer for Australian products.

[AA : A4905, VOLUME 22]