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179 Australia-Japan Trade Negotiations: Informal Discussions

6th December, 1956

CANBERRA

The Australian draft on Assurances [2] was handed over.

MR PHILLIPS in reply to a question by Mr Ushiba confirmed that we
would not require this type of assurance in the agreement but
would be satisfied with a nonpublic assurance. While it would have
'sales' value to Australia to publish such an assurance we would
be prepared to keep the matter confidential if this would make
easier for Japan.

MR USHIBA said that there was a limit to the Government-Exporter
relations in Japan. The type of Government to Government
consultations envisaged in the paper would be practicable from
Japan's point of view.

MR PHILLIPS said that the advantages of consultation would be:

1. it would acquaint the Japanese with the problems which arose
from time to time.

2. it would provide information on which the Japanese could base
and direct their action in Japan.

MR USHIBA explained that the Japanese Government could only take
action of the kind envisaged if an organisation existed which the
Government could approach. These organisations were private bodies
and government action was limited to encouraging and approving
steps taken by the associations. The difficulty is that for
smaller industries there may be no Association. Even where an
Association exists there are always some exporters who do not
belong to it.

Effective limitation of exports would require the co-operation of
Australian importers who should only deal with reputable exporters
and members of Associations.

The initiative in forming Associations lies with Japanese industry
and as interest in the Australian market grows, so the number and
strength of Associations will grow. The present level of licensing
in Australia should allow time for firmer commercial arrangements
to be consolidated, backed up by both Governments.

MR PHILLIPS suggested that consultation between the two
Governments would allow developments to be watched closely. Even
under present licensing conditions individual items could be
troublesome. He suggested that it should be possible for the
Japanese Government to take the initiative in encouraging
restraint in Japan although he realised there might be
difficulties in the implementation of such measures.

MR USHIBA agreed that the Japanese Government could encourage the
restraint by exporters. However, para 14 of the Australian draft
is a little too firm. [3] In Canada the situation was somewhat
different as only textiles were concerned and export Associations
were strong. In Australia's case there were many minor industries
involved. He repeated his suggestion that Australian importers
would need to co-operate by trading only with reputable Japanese
firms. This would make Japan's task much easier. He inquired
whether para 6 of the Australian draft meant that quality and
price were the main problems in connection with damage from
Japanese competition.

MR ROBERTSON explained that our intention was to point out the
matters which might require watching. We did not wish to suggest a
particular figure as a 'danger point' but rather to leave it to
the Japanese.

MR USHIBA said that Mr McEwen had mentioned that Japanese Exports
to Australia might increase (to or by) 20m. to 30m. as a result
of m.f.n. treatment. Could the Japanese take this as an indication
of a 'danger point'.

MR ROBERTSON explained that it would depend on how the increase
was spread. He instanced B category interchangeability as
illustrating the dangers of an overall figure.

MR USHIBA said that quality could be reasonably controlled by
Government inspection except where Australian importers dealt with
'fringe' exporters. Price was apparently a very important factor
yet Japan could not sell higher to Australia than to other markets
without running the risk of being accused of dumping elsewhere.

Mr Ushiba went on to point out that while the Japanese could
understand the protection of Australian industry, it would be very
difficult to explain the need to protect UK.

MR ROBERTSON said that our main interest was domestic industry but
that tariff preferences were after all exchanged with Commonwealth
countries and any damage to preferences will react against
Australia.

MR USHIBA said that the Japanese delegation recognised the
preference point vide Article XIX but it was very difficult to
explain this concept to the satisfaction of the Japanese exporters
etc. In this draft the reference was reasonable but he suggested
it would be wise to restrict references to protecting third party
interests and to confine statements to 'national interest' or
similar general phrase.

With reference to the application of special duties Mr Ushiba said
he understood that the Australian delegation view was that if
these duties were levied on all countries, because of Japanese
exports, Australia would be contravening G.A.T.T.

MR ROBERTSON confirmed that this was the Australian view.

1 Held in the Department of Trade. Present were Ushiba, Takashima,
Kawanami and Nishimiya, Phillips, Robertson and Lind.

2 'Assurances regarding the Export of Japanese goods to Australia'
dealt with the problem of assessing the extent to which vulnerable
Australian industries and British Commonwealth preferences might
be affected by relaxation of restrictions against Japanese trade.

It suggested 'voluntary action on the part of the Japanese
government and its export interests to ensure constant
watchfulness on Japanese exports in such matters as quantity,
quality and price', concentration on high quality goods, and
consultation between the two governments, but reserved Australia's
right to take emergency action against Japanese goods 'where no
other course would be practicable'. A copy of the draft is in NLA
: CRAWFORD PAPERS MS4514/9/34, AUSTRALIAN-JAPAN TRADE AGREEMENT.

3 Paragraph 14 read: 'It is the understanding of the Australian
Delegation that the Japanese Delegation accepts the views of the
Australian Delegation as expressed above and that the Government
of Japan will take such action with its exporters as may be
necessary to prevent serious damage to Australian industries or
severe disruption to the pattern of Australia's imports.'


[NLA : CRAWFORD PAPERS MS4514/9/33, JAPAN-AUSTRALIA TRADE NEGOTIATIONS 1956/57, pt i]
Last Updated: 11 September 2013
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