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Historical documents

210 Minute From Durie To Brown

16th May, 1957

CANBERRA

Japanese Trade Agreement
The Cabinet Committee this morning approved with enthusiasm the
Trade Agreement proposals and authorised Mr McEwen to convey the
Government's response to the Japanese immediately.

One or two points are still to be rounded off, but no difficulty
is expected in reaching agreement on these within the limits
approved by the Committee.

The main points cleared by the meeting this morning were:-

(a) Wool
We will accept the Japanese offer of a three-year binding of duty
free entry of wool associated with an undertaking on our part to
discuss with them during the three year term, the problem of full
G.A.T.T. application as between the two countries.

(b) wheat
We accept the Japanese offer of wheat quantities of 200,000 tons
in the first year; 300,000 tons in the second year; with third and
subsequent years to be determined through consultations.

Some definition of 'unfair trade practices' in relation to wheat
is to be worked out, and we will continue to press the Japanese to
place on record at least as a confidential paper the understanding
on quantities. The Japanese have been resisting a formal
undertaking on quantities.

(c) Emergency Action
We will have the right to apply emergency action, but there are
some refinements yet to be worked out, for example, as to extent
of Japanese reciprocal rights, and the extent to which
consultation will precede such emergency action.

Mr McEwen emphasised to Ministers that the objective in the
Agreement was not to make spectacular gains for Australia, but to
hold our trade position in the face of continually increased
balance in Australia's favour. This year trade is running at the
rate of 140m. exports to Japan, and 12m. imports from Japan.

Accordingly the application of m.f.n. treatment on duties and
import licensing was going to hurt some Australian interests. If
we accept the Agreement we had to be prepared for this, and not
have regrets afterwards. Ministers readily accepted this
situation.

The purpose in putting on the meeting this morning in some haste
was to enable Australia to make a substantial response to the
Japanese which could be conveyed to Tokyo and to Prime Minister
Kishi before the latter left for Washington on Monday next. The
Americans have not been too happy about some aspects of the
Agreement, particularly the wheat provisions and the undertaking
by the Japanese to consult with us before entering into any
surplus disposal deals with U.S.A.

Mr McEwen emphasised that we would have to rely a great deal on
Kishi's support in putting the agreement over in Japan, and it was
important for him to know before he went to Washington that
agreement was now certain.

He suggested that if our Prime Minister had any special views
about the proposal, or wanted to make any observations, we should
endeavour to get them from him immediately.

My own judgment is that the Prime Minister would be quite content
with the course of negotiations, but in view of his own
discussions with Kishi, you might think it desirable to mention
these matters to him at the first opportunity.

1 'Ad Hoc' Committee.

2 Document 206.


[NLA : MENZIES PAPERS MS4936/21/440, FOLDER 18]
Last Updated: 11 September 2013
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