CANBERRA

The point raised by Mr Propps is real enough. [1]

I have discussed it with Mr Phillips. I agree with Mr Phillips we
should not take any action with U.S.A. at this time. However, I
think we should look at the question from week to week, to assess
whether at any given time it is likely to pay us better to lay the
cards on the table with U.S.A. or to continue to take no action
there. In any case we may find our hand is forced by the way
things develop. If we decided to speak to the U.S., or felt we had
to do so, we could say we are asking an import quota of about one-
third of Japanese soft wheat requirements; this is a fair share
for reasons so and so, particularly as the U.S. has taken up or is
likely to take up a little more than one-third of the market with
its P.L.480 deal. The purpose of saying this to the Americans
would be to allay suspicion on their part that we want to tie up
the whole of the market apart from the P.L.480 and to make clearly
our arguments that we are not in fact being at all greedy about
our share of the market-pre-war we had about 60% of the then small
market; we now recognise that U.S. has done a good deal to develop
the market of grain in Japan so we come down from two-thirds to
about one-third.

However, we could say, in the event that the U.S. would refrain
from P.L.480 transactions with Japan, we would join with the U.S.

in seeking to have the Japanese institute a genuinely free
commercial import system for all wheat. To the Japanese we could
say their commitment to us was only until both Governments agreed
that a truly commercial and non-discriminatory system of importing
wheat was in operation. 'Commercial' in both cases would mean
unsubsidised or countervailed imports.