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196 Minute From Durie To Menzies

2nd April, 1957

SECRET

CANBERRA

Japanese Trading Negotiations
Negotiations with the Japanese Trade Delegation were resumed last
week. There is every indication of an agreement emerging shortly
subject to a final clearance by Ministers on some outstanding
points.

It is contemplated that Australia will give Japan most-favoured-
nation terms both on tariffs and import licensing, subject to our
right to impose emergency duties to protect Australian industries,
or industries of countries receiving preferences, from serious
injury caused by excessive Japanese imports.

Japan will bind itself to continue to give us most-favoured-nation
tariff treatment. To make this effective against the background of
Japanese trade practices, we are seeking specific assurance on
imports of particular commodities-wool, wheat, barley, sugar,
dried milk etc.

The general effect of the agreement will be that each party will
accord GATT treatment to the other, but of course the obligation
to do so will lie in this agreement and not in GATT.

The main negotiating problems for us are on wool and wheat. As we
suggested to you recently, Trade and Primary Industry are now
placing more emphasis on wool than on wheat. Japan is willing to
give us a satisfactory quota on wool, but we are also seeking the
binding of the present duty-free entry of wool into Japan. We are
also seeking a special duty on sugar. The Japanese delegation is
arguing that pure tariff concessions ought to be negotiated
separately after the m.f.n. agreement has been signed. Although
this is, from the Japanese point of view, a sound negotiating
approach, I would not be surprised if we can persuade them to make
an exception on wool and sugar, since they attach so much
importance to the m.f.n. principle.

It would be useful if a Ministerial meeting could be fitted in
before you left for Japan. [1] It would assist in informing you in
detail of the negotiations, but also it would give the negotiating
team a clearance on the lines on which they are pursing the
negotiations, since they are rapidly reaching the stage where
final decisions will be needed.

1 Menzies was to leave Australia on 10 April to visit Japan,
Thailand and the Philippines.


[AA : A1209/23, 57/5475]
Last Updated: 11 September 2013
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