TOKYO

No. 124/E4
The Ministry of Foreign Affairs presents its compliments to the
Australian Embassy in Japan and, with reference to the Ministry's
Note Verbale No. 417/E4 dated 17th November 1952 [1], and the
Memorandum of the Japanese Embassy in Australia presented to the
Australian Department of External Affairs on the date of the 27th
March, 1953 [2], has the honour to refer to the current
restrictions imposed by the Australian Government on imports of
Japanese goods into Australia.

Since its resumption after the war, the trade between Japan and
Australia had been steadily expanding to the mutual benefit until
the imposition of import restrictions by the Australian Government
on Japanese goods in March last year. However, Japan's exports to
Australia have since been contracting and during the second half
of 1952 they amounted in value to only one tenth of her imports
from Australia.

In this connection, the Ministry understands that, in consequence
of the talks which have been conducted with a view to finding ways
and means to expand flow of trade between Japan and the Sterling
Area, the United Kingdom Government have recommended to their
Colonial Governments to relax to certain extent the latters'
current import restrictions on Japanese goods and also have
informed it to the countries of the Commonwealth. With high hope,
the Ministry naturally expects the Australian steps towards
similar liberalization in due course of time.

In expressing the above hope, the Ministry would like to point out
that in sharp contrast with a marked improvement in recent months
of the overall balance of payments on the Australian part, Japan's
sterling holdings have been deteriorating since last fall, thus
forcing her, unless this downward tendency be expeditiously
arrested, to taper off her imports from the Sterling Area. In
addition, the attention of the Australian Government is also
invited to the fact that, in spite of Japan's having shelved the
dollar clause at the time of conclusion of the current Sterling
Payments Agreement in 1951, Japan has been and still is singled
out by the Australian authorities as a hard source together with
the dollar area. The Ministry feels unable to see as to why Japan
should not be entitled to be accorded at least the same treatment
in respect of the Australian import licensing as other soft
currency countries.

In the light of the above, the Ministry has the honour herewith to
propose to the Australian Government to start as soon as
practicable an informal talk between representatives of both
Governments, with a view to improving trade relations between the
two countries and, in particular, to discussing the points as
raised in this note. It is suggested in this regard that in
consideration of the fisheries negotiation now being undertaken in
Canberra [3], the talk will be held in Tokyo at the earliest time
convenient to the Australian party.