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60 Record Of Conversation In Department Of External Affairs

5th April, 1954

Australian Import Licensing Treatment of Japanese Goods
The interview was arranged following approval by the Prime
Minister, the Ministers for Trade and Customs, Commerce and
Agriculture, National Development, External Affairs and the
Treasurer that the gist of the draft note prepared by the
Department of Trade and Customs on 4th March, 1954, [1] should be
given verbally to the Japanese Embassy.

Mr Shaw referred to Mr Tange's conversation on 12th March with the
Japanese Ambassador [2] in which Mr Tange had explained the
reasons why it was not proposed at the present stage to reply
formally to the Japanese representations about the licensing
treatment accorded to Japanese goods. Mr Shaw said that we were
now, however, in a position to offer some observations on certain
points made in the Japanese note of 14th January [3] which would
clear up apparent misunderstandings, and to give some figures on
the extent of licences granted for Japanese goods, which would
show that the situation was improving from Japan's point of view.

Mr Shaw said that Japan's trade with Australia should be looked at
in the context of Japan's trade with the sterling area as a whole
and not merely on the bilateral level. Mr Kakitsubo agreed and
said that Japan did not expect that Australian imports from Japan
could be brought up to the level of her exports to Japan.

Mr Shaw then gave figures showing that the licences authorized for
Japanese imports had increased progressively from a value of
730,000 in the 1st quarter 1953 to 4,500,000 million in the 4th
quarter. The level of licensing was sustained at the latter rate
in the 1st quarter of 1954 and would be increased by approximately
15% in the 2nd quarter, bringing it to the equivalent of an annual
rate of 21 million. Figures were also given showing the increase
in licences authorized for specific categories of goods over the
period 1st October, 1952, to 31st December, 1953. It was pointed
out that the categories of goods for which applications were
considered had been progressively extended.

Mr Shaw impressed upon Mr Kakitsubo the fact that the foregoing
figures had not been published and the need for Japan to regard
them as strictly confidential. Mr Kakitsubo undertook to observe
this.

In answer to a question by Mr Kakitsubo whether licences were
actually issued up to the ceilings laid down for each quarter, Mr
Munro expressed his understanding that the Department of Trade and
Customs reviewed the figures of licences authorized at frequent
intervals during the quarter and made such adjustments between
categories of goods as were necessary to ensure that the total
would be reached. There was a possibility that, although licences
were taken out, particular transactions might fall through.

In regard to the method of dealing on an 'administrative' basis
with applications for licences to import Japanese goods, Mr Shaw
said that only about one third of total Australian imports in the
6 months ended 31st March, 1954, were covered by quotas. Mr
Kakitsubo observed that the abolition of 'A' category from 1st
April, 1954, and the transfer of many items to the 'n.q.r.' and
'administrative' lists would apparently result in a further
reduction of this figure.

As regards delays in the grant of licences Mr Shaw said that some
time was inevitably consumed in examining applications for goods
on the 'administrative' basis and said that this applied to
imports from all sources, not only from Japan. Every effort was
being made to minimise delays and make the system as efficient as
possible.

In connection with the point made in the Japanese note about rates
of duty on tinplate and plywood, Mr Shaw explained that the rates
of 12 1/2% and 57 1/2%, respectively, had been laid down
originally in 1937. The duties had been temporarily suspended for
limited periods prior to 1953 when supplies were short, in order
to encourage imports. When the shortage was over, the usual rates
had been reverted to.

Mr Kakitsubo seemed appreciative of the position revealed by the
licensing figures. Mr Kakitsubo referred to the presence in Canberra
of Mr Kitahara, a Japanese Government trade official who had had talks
in New Zealand. Mr Kitahara was in Australia in a personal capacity and
there had been no comment on his presence. He had reported that
New Zealand had a 'realistic' attitude to Japanese - New Zealand
trade. New Zealand could not sell so much wool as their qualities
were less fine than Australian but was interested in foodstuffs.

Mr Kakitsubo remarked on the increased consumption in Japan of
foreign style foods such as butter, and also of flour, due to the
relatively high purchasing power. He referred also to Japan's
interest in Australian rice and Jersey dairy cattle.

Mr Kakitsubo raised on his own initiative the idea of three
cornered deals such as Japan-Indonesia-Australia in which trade
deficits would be made good. He was told Australian policy did not
favour such deals. [4]

1 Document 53.

2 See Document 55.

3 Document 48.

4 The record was prepared by D.J. Munro.


[AA : A1838/278, 3103/10/2, iii]
Last Updated: 11 September 2013
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