CANBERRA

Trade Negotiations with Japan-Amendment of Customs Tariff
(Industries Preservation) Act

On 21.5.56 Cabinet (by Decision 203) [1] authorised the Department
of Trade to enter into formal trade negotiations with Japan with a
view to the conclusion of a trade agreement between Australia and
Japan.

2. At the same time Cabinet also decided that the Customs
Tariff(Industries Preservation) Act should be amended to enable
emergency duties to be applied to the extent necessary to control
low-cost imports from Japan so as to avoid serious damage to
Australian industry or established patterns of trade. This Act is
administered by the Department of Customs and Excise.

3. Shortly after Cabinet's decision the Department of Trade became
involved in important and protracted trade negotiations with the
United Kingdom. These negotiations are still under way and it had
been hoped that the commencement of formal negotiations with Japan
could be deferred until the negotiations with the United Kingdom
had been concluded.

4. Following discussions between the Department of Trade and the
Japanese Embassy early this week it became evident that the
commencement of formal discussions with Japan could not be delayed
for more than another fortnight or so and, in fact, the Department
of Trade has agreed to open negotiations with a trade delegation
which will arrive in Australia from Japan at the end of this
month.

5. The Department of Trade has advised that the timing and likely
trend of the coming negotiations has made the amendment of the
Customs Tariff (Industries Preservation) Act a matter of urgency
and that it will be necessary for the amendment to be made during
the present session of Parliament.

6. The nature of the proposed amendment has been discussed with
the Department of Trade and it is our joint view that the
insertion in the Act of a new section some-what on the following
lines would meet the problem with which we have to deal:-

'If the Minister is satisfied that any goods are being imported
into Australia from any country in such increased quantities or
under such condition as to cause or threaten-
(a) serious injury to producers in Australia of like or directly
competitive goods, or
(b) serious injury to producers in a third country of like or
directly competitive goods which are entitled to entry under the
British Preferential Tariff or any lower tariff,
he may, subject to any obligations incurred by His Majesty's
Government in Australia to the Government of another country under
or by virtue of an international agreement relating to tariffs or
trade, publish a notice in the Gazette specifying the goods as to
which he is so satisfied.

Upon publication of the notice, there shall be charged, collected
and paid to the use of the King, for the purposes of the
Commonwealth, on those goods imported into Australia a special
duty (in this section referred to as "the emergency duty").

The amount of the emergency duty in each case shall be the sum
which represents the difference between the landed duty paid cost
of those imported goods and a reasonable landed duty paid cost as
determined by the Minister, having regard to the landed duty paid
cost, if any, of like or directly competitive imported goods.

The emergency duty payable under this section shall be in addition
to such other duties, if any, as are payable under the Tariff.'

7. In view of the urgency of this matter it would be appreciated
if you could furnish me with your views as to the acceptability of
the proposed new section as soon as possible. One of my senior
officers (Mr Cork [2]) and an officer of the Department of Trade
(Mr Robertson) will be available to discuss the matter with you at
any time, if required.