LONDON

You spoke recently about the possibility of some gradual basis of
operation of the proposed Trade Agreement between Australia and
Japan.

I have passed your representations on to the Government in
Australia and also to the Minister for Trade, who is at present in
Tokyo.

As you know, the Australian Government is convinced that the
weight of circumstances of our trade and other relations with
Japan make an agreement necessary of the kind proposed. But we are
also convinced that the satisfactory operation of the agreement
will depend a good deal upon a general restraint by the Japanese
authorities in developing their export programme to Australia and
the Minister for Trade is therefore at present engaged in trying
to develop this understanding at the political level in Japan.

This is not without relation to the point you mentioned.

I might add that while the agreement will remove import licensing
discriminations which are being maintained now against Japan
alone, and will put her goods on the same tariff footing on entry
into Australia as the goods of almost all foreign countries, there
is of course no doubt that United Kingdom traders will continue to
enjoy the guaranteed margins of preference.