RESUMPTION OF PRIVATE TRADE WITH JAPAN
1. The declared policy of the Australian Government on the
resumption of private trade with Japan is:

(a) Opposition to a decision on resumption being taken outside the
Peace Conference.

(b) Agreement that preparations for the resumption of trade may be
undertaken provided equal facilities are granted to all Allied
nationals.

(Telegram No. 459 to the Australian Embassy, Washington, which
contains a statement of this policy is attached as Appendix A).

2. The Prime Minister, in a statement made on 13th May, 1947, re-
emphasised that Australia would not follow the United States in
resuming private trade with Japan on the date of 15th July, which
has been proposed by the United States, and expressed the need for
a prior decision on reparations and the completion of the Peace
Treaty with Japan.

3. Australia has not received support from other countries
represented on F.E.C. for the policy of Peace Conference decision
on resumption of trade. However, it is considered that the policy
should be adhered to by the Australian Government, precautions
being taken to ensure that no disadvantages accrue to Australian
commercial interests as a result of opposition by other countries.

4. Other nations, especially the United States and the United
Kingdom (see Telegrams 1.9586, 9[0]25, 9[0]22/3 and 9691 attached
[1]), have already begun preparations for the resumption of
private trade. The United States has sent a Trade Mission
comprising representatives of the Departments of State, War,
Commerce and Treasury, and the United States Credit Corporation
and Reconstruction Finance Commission to Japan to discuss with the
Supreme Commander, Allied Powers, problems associated with the
resumption of private trade. For twelve months the United States
has had banking and insurance representatives in Japan and a
United States airline has already commenced a service between the
United States and Japan. The United Kingdom has a Shipping Mission
in Tokyo, is sending an insurance representative and is
considering the advisability of sending a representative of
British banks. Further preparations, including compilation of
lists of businessmen interested in trade in Japan and preliminary
arrangements for the rescinding of the Trade with the Enemy Act,
are also receiving the attention of the United Kingdom Government.

New Zealand is also making preparations and has made relaxations
in its Trading with the Enemy Regulations which will facilitate
preparations by private businessmen.

5. The Australian representative on F.E.C., acting under
instructions, has presented a paper to F.E.C. on the question of
admission of private Allied traders to Japan to engage in
preparations for the resumption of private trade. The paper
stresses that only preparations are envisaged and that the
question of resumption, including date and conditions, is a matter
for decision by the Peace Conference. Discussions of this paper in
F.E.C. will probably take place in late May or early June. A
decision on resumption of trade and preparations for resumption
may, therefore, not be long delayed and Australia's policy needs
complete arid immediate formulation.

6. At the present time commercial relations with Japan are
restricted solely to trading between the Australian Government and
S.C.A.P. and Australian transactions have been confined to sale of
wool and purchase of raw silk, textiles and yarns.

7. Notwithstanding the Australian policy that the resumption of
private trade with Japan is a matter for decision by the Peace
Conference it seems that, particularly in view of the action
already taken by other countries, Australia should make detailed
preparations for the resumption of trade at the earliest possible
moment so as to ensure that Australian businessmen will be placed
on an equal footing with those of other nations at whatever date
trade is actually resumed. It is suggested that preparations might
be made in the following fields:

(a) General export and import trade;

(b) Finance (including banking and insurance);

(c) Shipping;

(d) Civil Aviation.

8. These preparations might include, inter alia:

(i) Compilation, by the Departments of Commerce and Agriculture
and Trade and Customs, of lists of businessmen interested in trade
with Japan.

(ii) Preparations by the Department of Trade and Customs for the
rescinding of the relevant sections of the Trading with the Enemy
Act and for the extension of import and export licensing to
include Japan, at the appropriate time.

(iii) Increasing trade representation in Japan and permitting
private trade representatives to proceed to Japan as soon as
possible.

(If any private traders go to Japan under Government sponsorship,
they will be required to defray their own expenses and their visit
will not, therefore, involve any cost to the Australian
Government.)
(iv) Engaging in discussions with the United States Trade Mission
which has recently gone to Japan.

9. It is also necessary to consider the desirability of
Commonwealth Departments making contact with private Australian
traders and trade associations regarding the general preparations
for the opening of private trade.

10. A specific question which arises also is the rate of exchange
to be fixed between the Australian 1 and the Japanese Yen. This
question has already been taken up in a preliminary manner with
the Department of Treasury and is receiving consideration.

11. IT IS THEREFORE RECOMMENDED THAT-notwithstanding the
Australian policy that the resumption of private trade with Japan
is a matter for decision by the Peace Conference, Australia
should:

(a) Make the most detailed preparations so that immediate
advantage may be taken of any relaxation of the ban on private
trade which may occur. These preparations should include those
mentioned in paragraphs 8, 9 and 10, and particularly should
include establishing contact with private Australian traders who
may be interested in post-war trade with Japan.

(b) Take immediate advantage, with other nations, of any decision
to resume private trade with Japan if, in spite of our opposition,
trade is in fact resumed prior to the Peace Conference. [2]

H.V. EVATT
Minister for External Affairs

D. COURTICE
Minister for Trade and Customs

R. T. POLLARD
Minister for Commerce and Agriculture