CANBERRA

Cabinet all day. Quite a good discussion on trade with Japan.

Decided to agree to an official conference on trade with them. The
semi-official discussions that have been going on with the
Japanese point to the fact that they would much like to have a
Trade Treaty on lines that would suit us, in which the
discrimination against Japan would be moved but we would be able
to get (or so it appears) pretty good safeguards about our
industries not being disrupted by Japanese competition. It sounded
rather too good to be true.

So far as ensuring that our exports to Japan (wool, wheat, etc.)
get a fair run, it is proposed to endeavour to achieve this by
asking for non-discrimination in respect of the allocation of
exchange regarding such purchases by Japan. Also the phrase 'there
will be no distortion of the established pattern of trade' is to
be used to indicate when our safeguards are to come into
operation.

In McEwen's absence a Cabinet Sub-Committee is to deal with any
Japanese Trade matters that arise-consisting of McMahon, Fadden,
McBride and myself. [1]