CANBERRA

The Ambassador [1] handed to Mr Tange, a Note from the Embassy
indicating Japan's willingness to enter into negotiations with
Australia, looking towards a trade agreement and another Note
covering drafts of agreements between Japan and Australia on (i)
Entry, Stay, Travelling and Residence, (ii) Business Activities
and (iii) Treatment of Ships.

The Ambassador explained that because of trade and payments
negotiations pending with United Kingdom, it would not be possible
for Japan to begin trade negotiations at the end of August, 1956,
as had been suggested in our note of 25th May, 1956. He added that
Japan hoped that Australia would be in a position to reply to
questions on the following matters raised during the informal
trade talks between Japanese and Australian officials:

(i) The application of GATT to trade relations between Japan and
Australia;

(ii) Discriminatory restrictions on imports from Japan (import
licensing and tariff duties).

The Secretary thanked the Ambassador. He said that the Minister
for Trade had agreed to the alterations in the press release
proposed by Japan. [2] He enquired whether the deletion of the
word 'formal' from the press release, coupled with the request for
replies to the matters referred to by the Ambassador, should be
taken as an indication that, unless satisfactory replies were
received on those matters, there would be no 'formal' trade talks.

Mr Suzuki said that this was not the intention of the note.

Mr Tange enquired whether the Japanese Government was insistent
that trade talks and discussion of the 'treaty matters', (i.e. the
matters dealt with in the second Note) should be combined. Mr
Suzuki said that the Japanese Government would have preferred
this, but realised that it might not be possible. The Secretary
reminded the Ambassador that discussion of the treaty matters
brought forward by the Ambassador would be complicated because of
Australia's Federal Constitution and the absence of precedents,
and would undoubtedly be prolonged. On the Australian side we
thought that the trade matters could and should be separated from
the others. However, we would make it clear to other Departments
involved that the Japanese Government was anxious to see some
progress in the discussion of the treaty matters. Discussions of
trade matters and treaty matters might perhaps proceed side by
side. Mr Suzuki indicated that this would be acceptable to the
Japanese Government. He confirmed that, in consideration of the
treaty matters listed in its 'initial statement' of 25th October,
1955 [3], Japan wanted preference given to the three matters dealt
with in the second of the two Notes which he had just handed to
the Secretary.

The Secretary said he thought the Department of Trade was not yet
in a position to reveal Australia's attitude on import licensing
and tariff duties. But the Government, knowing Japan's views, had
decided that there was scope for trade negotiation between Japan
and Australia. He asked whether the note implied that Japan wanted
answers to its earlier questions before submitting requests. The
Ambassador did not reply directly, but indicated Japan's anxiety
to have the answers as soon as possible.

Mr Tange said he could not say how the Department of Trade, which
would bear the main responsibility for the trade discussions,
would want to conduct them.

The Ambassador said that Japan would like if possible some further
indications whether the Australian Government would be ready to
negotiate on the treaty matters and the trade matters raised by
Japan when negotiations began. The Secretary said that we would
pass the Embassy's Notes and this comment to the relevant
Departments. It might be that the Australian authorities would
want to wait until they reached the Conference table before
discussing concessions to Japanese requests.