88 Minute From Shaw To Tange

11th November, 1954

CANBERRA

Australian-Japanese Trade Relations On the evening of 10th November the Cabinet Sub-Committee on International Commercial Policy decided that the Japanese Government should be informed that Australia is agreeable to examine with Japan mutual problems regarding trade relations. [1] It was decided, also, that the Ministers for Commerce and Customs, now in Geneva, should be given an opportunity to advise on the timing of such an announcement as there may be some factor relating to the GATT negotiations which we would need to consider.

It was agreed that the Minister for External Affairs should send a Note to the Japanese Ambassador conveying the Australian Government's decision as soon as confirmation had been received from Geneva.

2. On the question of the partial assimilation of import licensing of Japanese goods, there was a lengthy discussion on alternatives put forward by the Department of Customs in Canberra and that proposed in telegram GATT 8, paragraph 3, from the Ministers for Customs and Commerce in London. [2] It is understood the difference was on these lines: Customs Canberra suggested that on those goods on which assimilation cannot be given, the Japanese should be given a definite 25 per cent. quota of the total present importations. The oversea suggestion apparently is that the Japanese should be given a definite budget over and above the present importations of these items.

3. The Cabinet Sub-Committee were strongly of the view that the Canberra Customs proposals were the correct approach, mainly because they would have the effect of stabilising the total of imports and thus avoid aggravating the balance of payments difficulties which the Treasury said were looming up. They claimed also that the Japanese would have more flexibility within such a system. Australian manufacturers would be told also that the total imports would remain the same and the only people to suffer would be those from whom the 25 per cent. of present imports was diverted.

4. However, Ministers could not agree as to what was meant in 3(b) of GATT 8 and resolved to wait for some explanation.

5. The Prime Minister insisted upon separating very distinctly importing licensing treatment from tariff negotiations. (It is doubtful whether this will in fact be desirable or possible, but that will emerge when we work out the basis of discussions with the Japanese). On the point whether we should announce to the Japanese our willingness to commence trade talks, the Prime Minister after listening to the Acting Minister for Customs, was inclined to the view that we should not announce we would talk until we were quite sure what we had to offer. He was dissuaded from this view only be a reminder that Cabinet, on 14th September, had already made a decision on this issue [3] and it was clearly understood by the Ministers of Customs and Commerce that the decision would be implemented when they so requested from overseas. This they had done twice in most categoric and urgent terms.

6. The Department of Customs put forward all the reasons why it would be difficult to formulate a basis of tariff negotiations which might be profitable. They refused a discussion on the possibility of the Canadian type over-all M.F.N. Treaty with an anti-dumping safeguard.

7. However, once the decision to notify the Japanese has been conveyed we will have to again examine the basis of negotiations including the possibility of a Canadian-type agreement, the objections to which have not been clearly stated by Customs.

8. The points for immediate action are:

(1) Notification to the Japanese in the form of a simple Note from the Minister on the lines of the telegram which we are drafting to Geneva.

(2) Clearing up of the outstanding point of partial assimilation of import licensing in the light of the exchange between Canberra and Geneva.

1 Document 87.

2 Document 85.

3 Document 71.

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