CANBERRA

The Committee of Ministers looked at the position of the trade
negotiations with Japan on 16th May last and approved
recommendations which would enable the delegation to conclude the
negotiations. [2] The position now is that within a few days a
complete text should be agreed at the official level with the
Japanese. This process is likely to be completed about 19th or
20th June in Canberra by the leaders of the two delegations, and
further alterations would then be ruled out.

I have accepted the invitation of the Japanese Government to visit
Tokyo early in July to sign the Agreement. I attach considerable
importance to this, because so much of the success in operating
the Agreement without generating friction will depend upon
restraint by the Japanese authorities in developing their export
programme to Australia. This understanding must be brought home in
Tokyo at top political level and this is really not achievable
except on a personal basis between Ministers. This is the course
the Canadians followed with success.

Broadly, the agreement now in sight is very much as depicted in
the discussions on 16th May. There are perhaps two points I should
mention. On surplus disposal, the delegation had earlier reported
that Japan would consult before concluding any agreement with the
U.S.A. for the importation of surplus U.S. commodities affecting
Australia's export interests. In the event, the maximum commitment
we look like securing is that 'on request' by us at any time, we
would be able to talk to the Japanese-and they would give us
information-regarding a surplus transaction with U.S.A. This is
not as much as I had hoped for, but it will provide a basis for
entry into talks when Australia considers such talks necessary,
and should in practice give us opportunity to put our views before
the Japanese are committed. This is the first time we have secured
this kind of undertaking from any foreign Government and it is the
first time the Japanese have given such a commitment. They
rejected, they tell us, any kind of undertaking on surplus
disposals in their negotiations with Canada.

On the other hand, on 'emergency action' to protect Australian
industry against serious damage from imports from Japan, the
delegation has managed to avoid falling back (as they were
authorised to fall back) to the position where the Japanese would
have the right to take retaliatory counter measures if Australia
imposed discriminatory import restrictions.

As the total agreement now in sight does not depart significantly
from what we envisaged in our discussions in mid-May, it does not
appear necessary for the Cabinet Committee to meet again before I
authorise the Australian delegation to conclude negotiations.

Details of the agreement will, I expect, be released
simultaneously in Canberra and Tokyo after signature. However,
there will be some points in connection with the commitments or
understandings reached with Japan regarding our export commodities
and the arrangement on surplus disposals which the Japanese will
not wish to be published. As soon as practicable, I will be making
the full text of the Agreement available to Cabinet.