133 Minute From Brennan To Casey
Trade Negotiations with Japan
Permission is being sought to commence formal trade negotiations
with Japan on the basis set out under the heading,
'Recommendation', on pages 11 and 12. 
2. Trade consulted us departmentally last week: we were pleasantly
surprised with the liberal terms proposed for discussion. These
provide for on our side, elimination of discrimination applying
solely to Japan on import licensing procedures and tariffs. Japan
is the only major trading country which does not enjoy most-
favoured-non-tariff treatment. Special discriminatory import
licensing procedures have existed against Japan.
3. Foreign Policy Consideration
a. Japan must have reasonable trading opportunities with the non-
b. Australia should develop trading interests in Asia and the Far
c. Australia should not discriminate against low cost, low-wage
commercial producers. All Asian countries hope some time to become
such. The West will have to compete; but safeguards are necessary
to prevent violent disruption of normal trading patterns.
4. Likely effects of extending m.f.n. tariff to Japan
a. Most Japanese imports are 'B category' for import licensing
purposes (i.e. they are not essential). Imports of 'B category'
goods are fixed at 30% of imports for the year. Consequently, a
flood of Japanese goods is not likely.
b. Japan is not always the lowest cost supplier of major Japanese
c. Japan recognises the danger of flooding other markets and has
introduced export controls on some goods.
d. Australian industries can be protected by Tariff Board
5. Protection for regular suppliers, eg. U.K
a. The Minister for Trade proposes an amendment to the Industries
Preservation Act which could enable the introduction of emergency
duties if Japanese goods were to threaten unduly the interests of
regular suppliers, such as the U.K. See Recommendation (a)(iii) on
page 12, and note Recommendation (a)(ii) is subject to
b. Proposal is similar to that which Canada operates vis-a-vis
Japan except that the protection against excessive Japanese
competition in Canada's case is brought about by special
arrangements for determining value for duty instead of the
introduction of an emergency duty.
c. There is reason to believe that the Japanese Government will
regulate exports to prevent retaliatory action.
6 General economic considerations
a. We are discriminating against one of our major export markets
(see paragraph 30).
b. We might lose this market. Import restrictions would then be
accentuated, which would make further inroads into imports from
countries like the U.K.
7. There is considerable unemployment in Japan. Relaxation of
trade discrimination would help.
[AA : A1838/283, 759/1/7, iv]