CANBERRA

Australian Policy Towards Japan
1. The following note on the progress made in the implementation
of policy towards Japan has been compiled in accordance with your
request of 8 August 1955.

2. The policy of allowing Japan to have reasonable facilities for
taking part in her own defence, for meeting her economic
difficulties by expanding her export trade, and for developing her
political and economic life and institutions in a way that would
strengthen her association with the West, which was decided by
Cabinet on the 17th August, 195[4] [1], has progressed in the
following manner:

A. MATTERS ON AGENDUM WHICH HAVE BEEN CARRIED OUT

Japanese War Dead in Australian Territories
3. The Australian Government agreed to the Japanese Government's
suggestion that a vessel should be sent to recover Japanese war
dead from Australian Territories. Accordingly the Taisei Maru
visited Papua and New Guinea and other territories in February and
March of this year and took back the remains of 5093 Japanese war
dead to Japan.

Japan and the Colombo Plan
4. After opposing it for some years Australia supported Japan's
admission to the Colombo Plan as a donor country, in September
1954. Japan's technical know-how, industrial capacity and training
facilities are likely to be important factors in advancing the
plan in South East Asia.

Inclusion of Japan in SEATO
5. This idea has received no substantial support from any quarter
in Australia or Japan during the past twelve months. Some United
States and Japanese quarters that originally made suggestion have
not raised it lately. We are opposed to the idea as being neither
necessary nor desirable and it may be regarded as dead for all
practical purposes at the present time.

B. MATTERS WHICH STILL REMAIN TO BE COMPLETED
6. Considerable progress has been made in most of these matters
since August last year and some of them are in a stage close to
finality.

Trade with Japan
7. Trade between Australia and Japan has increased during the last
twelve months with an increase in Australian purchases correcting
slightly the hitherto very uneven balance of trade between the two
countries. Australian imports from Japan rose from 6.5 million in
1953-54 to 14 million in 1954-55. Japanese purchases from
Australia remained in the vicinity of 58.6 million for 1954-55.

and his successor, Mr Suzuki, have stressed the importance which
the Japanese attach to trade with Australia. Mr Suzuki has
requested that trade talks between Japan and Australia be opened
on 23 August. On our side while there is agreement at the
Government level on the desirability of increased trade with
Japan, there is reluctance on the part of the Minister of Trade
and Customs to agree to measures which may prejudice the interests
of Australian and British Manufacturers. The Minister of Commerce
and Agriculture is interested in any increase in the total volume
of trade which might lead to a rise in Japanese purchases. The
crux of the matter lies in whether the Japanese will be allowed to
compete for a share of the expanding Australian market.

International and national considerations would seem to require
that she should be allowed to compete on reasonable terms.

Japanese Defence Forces
9. Japan is continuing to develop armed forces adequate for her
own defence. The present level and targets of the forces are as
follows:

Present Strength Target
(July 1955) (June 1956)
Ground Self Defence Force 130,000 150,000
Civilians Attached 9,628 11,658
Maritime Self-Defence Force 15,808 19,391
Civilians Attached 577 997
Air Defence Force 6,287 10,346
Civilians Attached 451 1,159

Total 162,751 193,551

Up to date equipment for these forces is being supplied by the
United States, while much of the naval construction is being
carried out in Japan.

There appears to be no imminent danger of the invasion of Japan by
Russian or Chinese forces. The United States, which had been
pressing for greater Japanese efforts in building her defence
power against any threat from this quarter, has recently decided
to soft pedal rearmament and put greater emphasis upon economic
recovery.

Pearl Fisheries Dispute
10. There has been little development in the Pearl Fisheries
dispute. Pearling by the Japanese in Australian waters is still
being carried out under the Provisional Regime, the Japanese being
permitted to take 1,000 tons of pearl shell this year. They have
recently requested an adjustment of the tonnage limits for the
various areas of operation to enable them to take the 1,000 ton
total catch permitted under the Provisional Regime. The terms of
our understanding with the Japanese require that this request
should receive proper consideration.

11. Each side has presented to the other a draft of the special
Agreement submitting the Pearl Fisheries Dispute to the
International Court, but agreement on this draft is still distant.

The Japanese are now preparing comments on the Australian draft,
which was submitted to them in February of this year.

Compensation for Former Prisoners of War of the Japanese
12. The Japanese have met their obligations under Article 16 of
the Peace Treaty and have paid 4 1/2 million. to the I.C.R.C. [2]
The actual distribution of this money awaits a final determination
by the I.C.R.C. of the numbers of former prisoners of war to
receive compensation.

Japanese Violations of Australian Territorial Waters
13. Since the beginning of 1954 there have been a total of eight
sightings of foreign vessels in or near the territorial waters of
Australia and its Territories. Arrests followed in the case of two
of these. The first was the case of the Japanese vessel Kuroshio
Maru No. 6 which was wrecked off the coast of New Britain in
December, 1954. (The violation of territorial waters may have been
involuntary.) In the second case a fisherman who was left behind
turned out to be an Okinawan from an Okinawan vessel which had
been poaching shell. There are grounds for believing that some of
the other vessels sighted were probably Okinawan. Generally
speaking the violations have been less than previously and it
seems that protests made in Tokyo against violations have been
effective in checking these offences. The Maritime Safety Board in
Tokyo has issued warnings to fishermen against infringing the
territorial waters of other countries, and, though they have
pointed out the difficulty of enforcing these instructions in
every case, it seems that they have had some effect.

Japanese Class 'A' War Criminals
14. On 27th July we were advised by the United Kingdom High
Commissioner's Office that the United Kingdom agreed that the
sentences of the 12 'A' class war criminals should be terminated
after they would have spent ten years in custody-i.e. ten years
from the date of their initial arrests on suspicion of committing
war crimes. Though favouring outright termination of sentences,
the United Kingdom Government is expected to fall in with a
majority decision in favour of a system of parole. This means that
the decision of Cabinet dated 14 April 1955 [3] will shortly be
implemented.

Japanese Class 'B' and 'C' War Criminals
15. We received confidential advice from the United Kingdom High
Commissioner's office on 1st August that the United Kingdom had
decided that the life sentence of 'B' and 'C' class war criminals
within the jurisdiction of the United Kingdom should be treated as
15 years imprisonment qualifying a prisoner for release after ten
years.

Discretion will be reserved to detain a prisoner for a longer
period if, in the opinion of the United Kingdom, this is
necessary. This decision by the United Kingdom will make it
possible for us to apply the policy decided upon by Cabinet on the
14th April 1955.

Criminal Jurisdiction over UN Forces in Japan
16. Under the Protocol incorporated in the United Nations Status
of Forces Agreement with Japan the U.N. authorities have primary
jurisdiction over offences committed by U.N. Forces whilst on duty
or against other members of the U.N. Forces. Japan has the primary
right of jurisdiction in other cases but she can waive this right.

17. So far there has been no case where the Japanese have
sentenced an Australian serviceman to a gaol sentence. If a case
does arise an approach will be made to the Japanese Government to
see whether any Australian serving sentence in a Japanese gaol
could be transferred to Australia to serve his sentence.

BCOF Diverted Stocks Account
18. A sum of approximately 250,000 remains to be paid.

Japanese Activity in New Guinea
19. In conversation with the Prime Minister at The Hague in
February, Mr Luns [4] said that the Japanese continued to show
interest in New Guinea.

20. The Counsellor of the Netherlands Embassy recently showed some
interest in the terms under which Japanese labour was indentured
for the pearling industry in Australia, but his purpose was not
disclosed.

C. IMPORTANT NEW MATTERS OF POLICY THAT REQUIRE CONSIDERATION
21. In January and March proposals were made for the operation of
joint American-Japanese tuna-fishing enterprises to be established
with bases in the New Hebrides and New Caledonia. Each enterprise
involved the temporary entry on two-year permits of thirty to
forty technicians and the granting of 12-monthly visas to 200
fishermen. The Government expressed itself as firmly opposed to
the entry of Japanese to these territories and representations to
this effect were made to the United Kingdom and French
authorities.

22. Though the United Kingdom authorities have taken action to see
that enterprise was not proceeded with, the attitude of the French
is still uncertain.

The advisability of pressing this question further is a matter for
a careful consideration in the context of our overall policy
towards Japan.

The Entry of Japanese into Australia
23. The entry of Japanese into Australia is still on a very
restricted basis drawn up before the Peace Treaty. Each applicant
for entry has to be approved by the Commercial Counsellor of the
Australian Embassy and a strict limit is imposed.

24. Recommendations that the entry of Japanese should be placed on
the same basis as that of other Asians have been made to the
Department of Immigration [5], and it is understood that a
submission to this effect has been submitted to the Minister for
Immigration as part of a general review of the immigration policy.

25. The relaxation of the conditions of entry suggested above
would open the way for cultural and other exchanges, which would
contribute to the improvement of relations between countries.

Civil Aviation Agreement
26. Under the terms of Article 13 of the Peace Treaty, Japan 'will
enter into negotiations with any of the Allied Powers, promptly
upon the request of such Power or Powers, for the conclusion of
bilateral or multilateral agreements relating to international
civil ai[r] transport'.

Under the treaty Japan was required to accord to Powers desiring
to operate air services equality of opportunity in respect of the
operation and development of air services for a period of four
years from the coming into force of the Treaty. Any continuation
of service after that time (April 1956) would be subject to
negotiation between Japan and the power concerned.

An official of the Japanese Ministry of Foreign Affairs (Hori) is
leaving Japan on 19th August to bring to Australia a Japanese
draft of the proposed agreement between Japan and Australia.

Overall Policy

27. It is a matter for consideration whether the Western nations
in implementing policies designed to keep Japan viable
economically should not also continue to extend aid to her in
becoming a democratic nation. The reforms of the occupation are
not strongly based and timely reminders of the desirability of
seeing that any increase in wealth achieved in co-operation with
the West should be evenly distributed would not go amiss. The
tendency for wealth to be concentrated in a very few hands is as
deeply entrenched in Japan as in many other parts of Asia. In such
circumstances it is not unusual for the poverty of the masses to
be attributed entirely to external causes. This could lead to a
repetition of the policies of the thirties and forties. If we help
the Japanese we are entitled to see that the help is directed into
the right channels and that Japanese democracy becomes more and
more broadly based both economically and politically.

[AA : A10299/2, J3 JAPAN-AUSTRALIAN POLICY]