CANBERRA

Trade Discussions with Japan

[matter omitted]

2. The Comptroller-General of Customs (Mr Meere) and the Secretary
of the Department of Commerce and Agriculture (Mr Crawford)
attended the meeting.

Messrs Heyes and Robertson of Trade and Customs and Messrs
Westerman and Millwood of Commerce and Agriculture were also
present. [1]

3. Mr Crawford said that, in his opinion, the preliminary
discussions with the Japanese should be on a purely informal basis
and this should be stressed to the Japanese when they were advised
of the date on which we were prepared to commence discussions. For
this reason, he considered that only the two departments directly
interested in the matter-Trade and Customs and Commerce and
Agriculture-should be represented at the preliminary talks and, to
emphasize their informal nature, the Departments should be
represented by officers of First Assistant Secretary status and
not by departmental heads.

4. Mr Crawford then said that, in his view, the preliminary talks
should be of an exploratory nature only, attention being given to
the respective export interests of each country in the market of
the other country. On this basis:-

(a) Our representatives would deal with our export commodities
one-by-one and indicate the nature of the treatment which we
desired be accorded to each Australian product. In the case of
wheat, for example, we would request quota allocations based on
the historical pattern of our wheat export trade with Japan (in
order to ensure that the treatment which we received would be fair
in relation to that accorded to other countries, particularly
'surplus disposal' countries like the U.S.A.).

Mr Crawford proposed the commodity-by-commodity approach as
reasonable. We can scarcely ask the Japanese for a guarantee of
non-discriminatory treatment because, having invoked Article XXXV
of G.A.T.T., it is clear that we do not intend to extend such
treatment to Japanese goods.

(b) The Japanese would then be invited to outline the problems
facing their export trade with Australia and the requests which
they wished to submit. We would, in turn, comment on their
statements and on the practicability of further consideration
being given to particular requests as, for example, to a request
for complete m.f.n. tariff treatment.

5. Mr Crawford then went on to say that:-

(a) Whatever our ultimate intention, we should give the Japanese
the impression that we envisaged the continuation of
discriminatory import licensing restrictions against some of their
goods. Apart from negotiation purposes with the Japanese, this
would enable, if necessary, an approach to be made at Ministerial
level to the United Kingdom which might secure some favourable
concessions for our exports to that country in return for favoured
treatment to certain United Kingdom exports, e.g. textiles, which
would otherwise be likely to suffer from intensified Japanese
competition in the Australian market.

(b) We should not permit the Japanese to revive the G.A.T.T. issue
at the discussions. The Government had already made its decision
on this question.

6. Mr Meere then outlined the nature of the work which his
department had done in connection with the impending discussions.

He said that a selection had been made of all items which appeared
to be of actual and potential significance in our import trade
with Japan. Comprehensive sheets had been prepared in respect of
each of these items which total 311. The sheets, he said, are
being roneoed so that they will be available for reference in
interdepartmental discussions and for the information of
Ministers. Mr Meere produced copies of several of these sheets
which he handed to Mr Crawford.

7. Mr Meere said that a special committee had been set up in the
Department to report on the extent of the tariff and import
licensing concessions which might be accorded to Japan. In
addition to the item sheets referred to in the previous paragraph,
the committee had examined all other items in the Customs Tariff.

(There are approximately 2,600 items in the Tariff.) The task was
a large one, taking considerable time, but the committee had
completed its work and submitted a report. Mr Meere handed Mr
Crawford a copy of the committee's report.

8. Mr Meere said his Department had reached the stage when
discussions with the Japanese could begin. He said that he agreed
with the views expressed by Mr Crawford (which are outlined in
paragraphs 3 to 6 above) and that these would form the basis of
the preliminary talks with the Japanese. Mr Heyes would be the
senior representative of the Department of Trade and Customs at
the discussions and Mr Westerman, he assumed, the senior
representative of Commerce and Agriculture. Mr Crawford concurred.

9. It was agreed that consideration should now [be given] [2] to
the question of formulating the requests which (we would] submit
to the Japanese. This would involve drawing [up a] 'balanced'
request list which would be determined [in the light] of the
concessions which we would be prepared to [accord] Japan and would
be the responsibility of Messrs Robertson and Millwood. The list
would show our proposed import concessions on one side and our
export requests on the other. It would be for interdepartmental
use only and, when completed, a further interdepartmental meeting
would be held to examine the list and make any necessary
adjustments before advising the Japanese of the date on which
discussions could commence. The meeting, it was hoped, could be
held next week.