Trade:

7. Mr Yamamoto referred to the recent Trade Agreement between
Japan and Canada and said that he hoped similar satisfactory
arrangements could be made with Australia. He mentioned the large
unfavourable balance of trade with Australia, and said that this
was causing concern in Japan. The licensing system employed by
Australia singled out Japan for what appeared to be discriminatory
treatment. Australian trade officials had pointed out that this
individual position accorded Japan could have advantages insofar
as Japan was not required to face competition. Nevertheless the
fact that Japan appeared to be discriminated against was causing
public resentment and the Japanese Government wanted Japan
included in the same group as O.E.E.C. [1] countries. Mr Yamamoto
said he felt that some gesture by Australia would be most useful
in helping to dampen the feeling which the present lop-sided trade
balance was creating in Japan. He admitted that Japan would have
to continue to import from Australia, but pointed out that Japan
was now importing wool from the Argentine, with whom she enjoyed a
balance of trade. Mr Yamamoto also emphasised that Japan would
like to negotiate with Australia within the framework of GATT. In
concluding Mr Yamamoto said that he personally felt that trade
negotiations should only take place if there was good prospect of
a reasonable settlement. He said it might be preferable not to
negotiate at all if no agreement was likely.