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Historical documents

349 Cumes to Wade [1]

Letter CANBERRA, 25 March 1949

PERSONAL AND CONFIDENTIAL

As I mentioned to you over the telephone, the Australian
Delegation at the Third Session of the G.A.T.T. Contracting
Parties [2] Will continue to oppose extension of most-favoured-
nation treatment to Japan. From your Department's Note of 26th
February and memorandum of 3rd March, I gather that the New
Zealand attitude win be much the same.

In broad terms we fail to see how the granting of M.F.N. by the
G.A.T.T. countries would result in any appreciable increase in
Japanese exports immediately, although it would probably
facilitate such an increase in the somewhat indefinite future. Any
alleviation of the financial burden on the United States through
extension of M.F.N. would, it seems, be postponed accordingly. On
the other hand there are important considerations which operate
against extension of M.F.N. by Australia at the present time.

Included in these unfavourable factors are doubt about affording
tariff treatment of this kind to Japan before the conclusion of
the Peace Treaty and also the domestic political difficulty of
affording Japan treatment better than she received from Australia
in pre-war years at a time when the state of war between Australia
and Japan has not yet been formally terminated. There are other
rather subsidiary objections, for example, even if the political
difficulties mentioned above were overcome it would obviously be
impossible to consider any extension of M.F.N. until a single
exchange rate for the yen has actually been fixed and thus an
assessment of the competitive position of Japanese exports in the
Australian market being made possible.

In the past, Australia has taken the lead in opposing the United
States on this issue and at times has received perhaps inadequate
support from other delegations. At the Third Session of the
G.A.T.T. Contracting Parties it is not proposed that this feature
of discussions should recur and in the event that Australia were
forced into a position where she would have to take a somewhat
lone stand, the delegation would be content to re-state
Australia's case and there let the matter rest. [3]

1 R.H. Wade, Office of the High Commissioner for New Zealand.

2 Held from 8 April-13 August 1949.

3 At the third session a US proposal to accord most-favoured-
nation treatment to Japan on a reciprocal basis was with drawn
from the agenda prior to its consideration.


[AA:A1838/283, 731/9]
Last Updated: 11 September 2013
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