CANBERRA

I should like to give you an account of my visit to Japan. [1]
First of all, however, I wish to thank you for the briefing
material prepared by your Department. This background information,
together with your letter of 19th February describing your talk
with Suzuki, was of considerable value and I was able to draw upon
this material on a number of occasions.

The discussions about the GATT problems were quite short. Mr.

Fujiyama, the Japanese Foreign Minister, briefly stated that he
hoped that Australia would send a good delegation to the Tokyo
Conference and that Australia would be able to withdraw the
application of Article XXXV. I replied that you had recently
conveyed our position on Article XXXV to Mr. Suzuki, and that we
intended to study the question at the appropriate time in the
light of further experience of the present Trade Treaty. I added
that Japanese trade with Australia had not been adversely affected
by the application of Article XXXV. Mr Fujiyama did not take the
subject any further.

Subsequently one of the officers travelling with me went over the
ground with Japanese Foreign Office officials. He thought that the
Japanese understood and appreciated the points you had made to
Suzuki.

The trade topic, in a general way, was in the forefront during a
great part of my visit-which is perhaps not surprising in view of
Japan's dependence on external trade and the importance of
economic questions in its foreign relations. Not that I was under
pressure on trade questions; on the contrary, there seemed to be
satisfaction on the Japanese side with the present state of our
trade relations. I had good opportunities to explain our attitude
and interests at press conferences, at functions given by the
Japan-Australia Society and the Foreign Correspondents' Club, and
on other occasions. I was impressed by the vigorous interest shown
by a range of top Japanese business executives in trade, commerce
and shipping with Australia. The Japanese seem confident of their
ability to keep on improving their position in our market and I
surmise that Australia may be of growing interest to them from the
standpoint of investment, assured access to raw materials, etc. I
have noted also, from your letter of 19th February, that you are
assisting the Japanese with studies on how they might develop
their trade to meet essential import requirements.

I came away from Japan with an acute realization of the importance
of trade relations within our overall relations with that country.

I believe that the goodwill shown on both sides and the business-
like administration of the Trade Treaty have contributed much to
the steady improvement in general relations. Indeed, I would not
wish to minimize the value of this favourable trade climate for
enhancing cooperation and understanding in other fields.

My talk with Fujiyama ranged over the main political questions in
North Asia and South-East Asia. I think progress was made in these
discussions in encouraging the Japanese to reveal their thoughts
to us on political matters of common concern.

The United States Ambassador, Douglas MacArthur had a long talk
with me in which he gave me his views on Japan, to which I was
largely content to listen. I am enclosing a lengthy summary of his
review which speaks for itself. My subsequent talks and
observations confirmed the importance and general validity of his
views. Japan has emerged as an independent and major world power
and is bound to reestablish for herself an active political and
diplomatic role in Asia. I was encouraged by the realization among
Japanese leaders that Japan's interests lay with the free world.

This is not confined to retaining the security and defence
protection afforded by the United States. I think there is an
awareness that Japan's interests as a trading and shipping nation,
vitally dependent on foreign markets for her products and on
foreign sources of supply for raw materials, can best be served by
her belonging to the community of nations pursuing multilateral
trade policies.

In contrast, the Chinese Communists have broken off trade
relations with Japan and are crudely and openly using the trade
weapon to induce Japan to grant them political recognition and
sever relations with the Chinese Nationalists. Their tactics were
the object of much public attention while I was in Japan. I
believe that as a broad aim, the countries of the free world
should provide a continued demonstration of their willingness to
give Japan reasonable trading opportunities; this is the best
counter to these Communist efforts to use trade in order to force
a reorientation in Japan's external relations.

In as much as these matters relate not only to Australian-Japanese
relations but also in various ways to international trade
discussions, I trust you will find these observations of some
interest and value.