CANBERRA

Japan
As I said, I am concerned that before it is too late in the piece
in our negotiations with the Japanese, that we should satisfy
ourselves 100% that the reserve power under the tariff heading
only is sufficient to give the Government the 'full safeguard'
that was promised in the Cabinet Decision. [1]

As I have explained, it was my conception throughout that we would
negotiate this treaty with the Japanese on the basis of unfettered
power to take emergency action under the heading of import
licensing as well as similar freedom to take emergency action
under the tariff heading.

I now understand that in discussions to date we have talked only
of an emergency power under the tariff heading.

I appreciate that it might be difficult at this stage in the
negotiations to inject the idea that we also want a clear
understanding with the Japanese that we should have unfettered
emergency power under the import licensing heading. However, even
if this is difficult and awkward at this stage, it would be
considerably more difficult and awkward at a later stage for us to
find that in fact the tariff power did not cover us adequately or
enable us to take the most appropriate action for any particular
situation that might arise and for which with any hindsight we
would then see that a reserve power under import licensing would
in fact enable us to cope with that situation.

I, therefore, feel rather strongly that it is essential that the
Department satisfy itself that in any conceivable situation that
should arise the tariff emergency power alone gives the Government
the right to 'full safeguards' as promised in the Cabinet
Submission. [2] To my mind, this requires a fairly close probe of
the likely situations, e.g. I do not see how the tariff power
enables you to control the flow of imports in our emergency
position at a certain level which of course the import licensing
power would enable you to do. If under the tariff power we could
institute tariff quotas that might meet my point, but you say this
cannot be done under the tariff power.

The other types of situations that I see are:

(a) the single shipload case;

(b) the possibility of a case where there may be technical
difficulties in the tariff field which would not arise in the
import licensing field (I cannot be more definite than this
because I just don't know-the tariff experts might show that there
is something or nothing in this notion);

(c) is it going to be easy in practice to impose an emergency
tariff duty-even though there is unquestioned right under the
agreement to do so-on an article which though cheap in price is
also very cheap in quality;

(d) the normal case where I think the tariff power is adequate
would be a simple inflow of Japanese goods at a high volume where
the threat of the imposition of a special duty would control the
situation.

I suggest you ask Carmody [3] to give you a considered view on the
adequacy of the tariff emergency power but I do feel you will need
to examine the position pretty closely yourself with different
tariff and licensing people.