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Historical documents

3 Submission 32 To Cabinet By O'sullivan

16th June, 1951

Trade with Japan

In the post-war period the issue of import licences for Japanese
goods has been confined to raw materials and semi-manufactured and
manufactured goods of an essential nature. No licences have been
issued for finished consumer goods, such as crockery, which would
reach the Australian public stamped with the country of origin.

2. Payments for Japanese goods are governed by the terms of a
Sterling Area Payments Arrangement between Sterling Area
countries, including Australia, on the one hand, and SCAP,
representing Japan, on the other. This arrangement contains a
provision that SCAP may convert his sterling balances into dollars
when they exceed Japan's requirements and our restrictive
licensing policy in regard to Japanese goods has been designed to
assist in avoiding the loss of dollars to Japan.

3. Recent trends in the level of trade and payments between the
Sterling Area and Japan have greatly reduced the possibility of
the loss of dollars to Japan and for the present at least there is
no need on financial grounds to limit the issue of licences for
Japanese goods to those of an essential nature.

4. The continued receipt of applications for licences for consumer
goods of Japanese origin indicates that there is an unsatisfied
demand in Australia for goods of that type and an easing of the
present licensing restrictions would:-

(a) Permit increased importations from Japan which would tend to
dampen down inflationary pressures; and
(b) Make larger credits available to Japan which could be used for
the purchase of Sterling Area goods. Japan is a traditionally
important market for Australian exports and any action which
restricts purchases from Japan tends to restrict the ability of
Japan to purchase Australian goods as well as those from other
Sterling Area countries. Since the war the value of Australian
exports to Japan (mainly wool) has substantially exceeded the
value of Australia's imports from Japan.

5. It is recognised that there are important political
considerations involved in the licensing of consumer goods of
Japanese origin. On the other hand there are sound economic and
financial reasons for increasing the scope and volume of our
imports from Japan and it is recommended that:-

(i) As an initial step, licences be issued for the importation of
limited quantities of consumer goods of Japanese origin, and
(ii) The quantities be increased at the discretion of the Minister
for Trade and Customs in the light of subsequent relevant

[AA : A4905, VOLUME 2]
Last Updated: 11 September 2013
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