CANBERRA

Mr Kono and Trade Negotiations with Japan
Telegrams 389 and 392 [1] from Tokyo discuss Japanese policy on
the current trade negotiations with Australia and the role being
played by Mr Kono, the Japanese Minister for Agriculture and
Forestry.

2. The gist of the first telegram from our Commercial Counsellor
is that:

(i) Kono alone opposes the acceptance of our proposal that Japan
take less American surplus wheat so as to give Australia the
opportunity to compete in the Japanese commercial market for
wheat;

(ii) Other Japanese Cabinet Ministers and business interests
favour meeting our proposal and thus removing the only remaining
obstacle to a trade agreement.

3. Stuart further implies that Kono, who has Ministerial control
over the use of counterpart funds derived from the sale of US
agricultural surpluses, is using this control for ... purposes of
his own. He urges that we do not give way on this question of
wheat imports and allow Kono to chalk up a further triumph.

4. Sir Alan Watt comments that Stuart exaggerates Kono's power and
suggests that his strength is declining and will decline further
when Prime Minister Hatoyama retires.

5. I would agree that Stuart has been over-influenced by the view
of Yoshino, the senior trade official with whom he talked.

Japanese officials tend to think in terms of black and white when
it comes to those opposing their policies and Kono emerges from
the reported talk as impossibly powerful and villainous.

6. ...He is also powerful because of his contributions to the
Party, his ability, his hold over the ailing Hatoyama and by
reason of the backing of his own feud[al]istically loyal henchmen
in the Party.

7. I would conclude that:

(a) Kono is not unsupported in his stand, even though his forceful
personality may make him appear so;

(b) his influence may not decline, particularly if he is
supporting Kishi for the Prime Ministership. He would then
supplant Kishi as Secretary-General of the Party;

(c) therefore an adjournment should not be decided on merely in
the hope of finding the Japanese more compliant in a few months
time;

(d) it would be very difficult to pin the cause of a breakdown on
Kono, who could influence the tone of Japanese Government hand-
outs and quite possibly even influence part of the press. In any
event the Japanese are not given to publicizing any case except
Japan's own.