CANBERRA

1. The Australian objective is an agreement which will ensure
opportunity for each country to market its goods in the territory
of the other under fair and stable conditions of trade.

2. In the Australian view, such an agreement would contain a
number of reciprocal undertakings, and would be supplemented by
exchange of notes on particular matters.

3. With regard to the treatment by Japan of goods imported from
Australia, the Australian Government requests:-

(a) Most-favoured-nation treatment with respect to customs duties
and other charges affecting imports and with respect to rules and
formalities affecting imports including the application of
internal taxes and charges affecting internal sales, distribution
and use of products.

(b) Non-discriminatory treatment in import restrictions, foreign
exchange matters and State-trading operations.

4. In the course of negotiations the Australian Government will
seek specific undertakings on the part of the Japanese Government
designed to give practical effect to paragraphs 1 and 3 above.

Thus Australian requests include:-

(i) In relation to import licensing and/or exchange control-
(a) in respect of all goods imported from Australia, the
continuation of treatment not less favourable than that now
accorded;

(b) the inclusion of particular commodities such as raw wool, beef
tallow, cattle hides, in the Automatic Approval category. Raw wool
here includes greasy, scoured and carbonised wool, skin wools and
slipe, tops, roving waste and waste of greasy wool;

(c) provision for the issue of import licences for goods such as
dried fruit when imported from Australia;

(d) in respect of other products, such as wheat, barley, sugar,
dried skim milk, guaranteed minimum import quotas together with
guaranteed opportunities to supply not less than stated percentage
shares of imports into Japan.

(ii) In relation to tariffs:-

(a) the binding of duty free entry on wool;

(b) amendment of the present item in the Japanese Customs Tariff
relating to sugar to provide that Australian raw sugar of less
than 99polarisation be subject to the same rate of duty as sugar
of less than 98 polarisation.

(iii) In relation to possible receivals from third countries of
surplus commodities of a kind exported by Australia, an
undertaking to consult with the Australian Government before
entering into arrangements with third countries for such
receivals; and recognition that for the purposes of the proposed
trade agreement between Australia and Japan imports of products
under concessional, noncommercial or other special terms are to be
regarded as imports for the purposes of 3(b) and 4(i) above. [1]

5. The Australian Government will also wish to discuss relevant

trade or economic policies of the Japanese Government as they may
now or in the future affect the importation into or consumption in
Japan of commodities in which Australia has a major export
interest such as wool or grains, and in this respect will seek
assurances in an appropriate form to safeguard Australia's
interests in the Japanese market.

6. It is contemplated that in respect of commitments in the field
of import licensing or exchange controls, the proposed trade
agreement will contain balance of payments escape clauses and
provisions for consultation in respect of the treatment accorded
particular products.

7. It is proposed that matters relating to the content of the
proposed agreement apart from matters referred to above should be
discussed in the course of negotiations.

8. The foregoing requests are subject to later additions,
deletions, or other amendment.

EXPLANATORY NOTE
In accordance with the note presented to the Japanese Embassy on
25th May 1956, by the Department of External Affairs [2], this
request list is confined to those matters which affect Australia's
exports to Japan. The Australian aim in these negotiations is an
agreement which will provide a general framework for the trade
between Australia and Japan and to achieve this it will doubtless
be necessary to consider a number of other questions as well as
tariff and import licensing treatment and other matters mentioned
in the Australian request list. However, we consider that other
matters which we may wish to include in the agreement may be
conveniently left to a later stage of the negotiations.

General principles of most-favoured-nation and non-discriminatory
treatment are set out on para 3 of the Australian request list. In
the light of Japan's import and exchange controls, we do not think
that the principle of most-favoured-nation treatment can be made
fully effective in actual trade unless there is also
nondiscriminatory treatment in import licensing; and that the
broad undertaking of nondiscrimination in import licensing needs
to be given more precise meaning in terms of its actual
application to individual Australian products. The requests in
para 4 are therefore designed to provide the necessary practical
interpretation of the principles set out in para 3 (b) and (6).

As regards the minimum quotas mentioned in para 4 i (d) we expect
to be able to specify the quotas required in the course of the
negotiations.

We do not wish the requests presented here to be regarded as in
any sense a final list, even in relation to the treatment of
Australian export commodities, and as is stated in the request
list, we may wish to make amendments to it as the negotiations
proceed.