CANBERRA

Japanese Trade Agreement-Deputation from ACMA
For your meeting with ACMA this afternoon, Jones has prepared the
attached papers. They comprise:

(a) A general note;

(b) A brief outline of the provisions of the Agreement;

(c) A commentary on the particular points made in the ACMA letter.

[1]

Also attached is a copy of the letter from the Chambers and a copy
of the Agreement.

The following observations may be helpful in determining the
response to the deputation.

(1) Tariff Protection Policy. It would be reasonable to say that
this is not an entirely relevant argument. Whether or not
manufacturers are dissatisfied about the Government's general
tariff policy and the recent treatment of individual Tariff Board
reports, is not a principal factor in considering the Trade
Agreement with Japan. In any event, Mr McEwen has already said
publicly that these matters are being considered and no doubt he
would welcome the considered views of the Chambers of
Manufacturers on this problem.

(2) Emergency Action under the Agreement. This appears to be the
key to the complaint. The Chambers have either misunderstood or do
not accept Mr McEwen's assurances that the Agreement entitles us
to take emergency action in certain circumstances. The fact is
that if the Agreement does not allow emergency action, then the
whole Agreement must be regarded as one of the most successful
confidence tricks of all time.

However, I imagine that the real concern of the Chambers is their
expectation that Mr McEwen will be unwilling rather than unable
and in the event the Chambers will undoubtedly claim that they
were right in their expectations because they will produce
individual cases where, in their view, emergency action was
clearly needed but the Government failed to act.

There are, therefore, two aspects of the problem. The first is
that clearly the Government has a right to emergency action; the
second is that the Government is not going to be panicked into
using that action every time the Chambers of Manufacturers make a
claim. The Agreement has got to be given an opportunity to work
and it would perhaps be as well to be quite frank in putting it to
the Chambers that the Government would expect that the use of the
emergency provisions would be the rare exception.

(3) Japanese Voluntary Restraint. It will not be possible now or
in the future to convince the Chambers of Manufacturers that this
is a worthwhile provision and that Japanese intentions are
honourable. The Government could be well satisfied that the
provision is working effectively, but it only takes one
manufacturer to claim that Japanese imports have put him out of
business and the undertaking is discredited. There will be
references to Canadian experience where the Government and
officials have been well satisfied with the arrangement, but not
manufacturers, and the case just cannot be proved. It is only left
to us to emphasise our belief in the efficacy of the arrangement
and the Government's view that this provision is an integral part
of the Agreement and if it does not work to the Government's
satisfaction, the whole Agreement is invalidated.