31st October, 1955
CANBERRA
It is gratifying to note that trade between Japan and Australia improved to a certain degree during the last fiscal year. There are various reasons to believe that this tendency of improvement can be further strengthened, and, indeed, there is a common desire on both sides to see trade between our two countries expanded to the greatest possible extent.
We are, therefore, very much pleased to be able to enter into talks with you, Gentlemen, representing the Departments primarily concerned, to examine mutual trade problems.
It has been agreed upon to conduct the present talks on an informal and purely exploratory basis. There are a great number of problems involved in this field of trade. Unfortunately, however, many of them have not been fully discussed between our two Governments so far. Therefore it is appropriate to explore the possibility of expanding trade by means of informal discussions on these problems.
Probably, some of them will be satisfactorily done away with in the course of informal talks, but there may be such problems that require more formal negotiation. At any rate, we wish to cover all the relevant fields so that both Governments will henceforth be able to take effective and constructive steps with a clearer perspective.
I am confident that, through a full and frank exchange of views, we shall be able to achieve a wider range of agreement on measures to be taken for the promotion of our mutual trade. Accordingly, we shall be quite frank in presenting our views and also try to give you as much information as possible as you may wish to have with regard to our trade policies and administrative measures. We hope your side will also be prepared to do the same.
Now, allow me to touch upon, briefly, the items proposed from our side for discussion.
(1) Application of GATT provisions to trade relations between Japan and Australia We are grateful for the support the Australian Government extended to Japan’s application for the accession to the General Agreement on Tariffs and Trade. At the same time, however, we have to express our deep disappointment about the fact that the Government of Australia chose to invoke Article XXXV of the Agreement.
I trust the position of the Japanese Government is clearly presented in the statement transmitted to the other member countries, through the GATT Secretariat, on the 7th of this month.
We are not unaware of the apprehensions on the part of the Australian Government with regard to possible undesirable effects to be inflicted on the Australian industries in case of an abnormal influx of Japanese goods in domestic markets.
In this connection there are already the provisions of Article XIX of the General Agreement for protective measures applicable in emergency cases, and in order to supplement these provisions efforts are being made to introduce a new interpretation with regard to Article XXIII, paragraph 1(c) to be established as an ‘interpretative note’.
We earnestly hope that the Australian Government will find these as sufficient safeguards to eliminate the above-mentioned apprehensions and cease to invoke Article XXXV in regard to the trading relations with Japan at an early date.
If there are other reasons for further apprehensions, we should like to request that the Australian representatives will be good enough to give us an explanation about them.
(2) Matters to be dealt with usually in a Treaty of Friendship, Commerce and Navigation It has been customary for the Japanese Government to conclude Treaties of Friendship, Commerce and Navigation with other countries, in order to place its international trading relations on a stable basis. This practice has been regarded as very suitable not only by the Japanese Government but also by our business people. It is therefore requested that the policy of the Australian Government will be indicated on this matter in the course of the present talks.
Under a Treaty of Friendship, Commerce and Navigation, the following problems are usually stipulated:
Entry, stay, travelling and residence; Establishment of companies;
Protection of persons and property; Judicial rights; Business activities; Property rights; Internal taxation; Prevention of double taxation; Social security; Foreign exchange control;
Customs tariff; Entry of goods; Customs administration; Internal treatment of goods; Commercial travellers; Freedom of commerce and navigation; Treatment of ships; Consular convention matters;
Transit of persons and goods; Industrial property rights.
At present, there are provisions of Article XII in the Treaty of Peace between Japan and the Allied Powers signed at San Francisco in 1951. However, these provisions will cease to be effective next April. [2] Therefore, it is deemed necessary to enter into a treaty on these matters.
In case the Australian Government is not yet prepared to enter into such a treaty or agreement with Japan, we wish to take up the individual problems mentioned above.
For instance, under the present circumstances, Australian businessmen are allowed to enter, stay, travel and reside, together with their families, in Japan on an equal basis with other foreign nationals. These Australian nationals are being treated without any discrimination. On the other hand, Japanese businessmen are not accorded the same treatment in this country at present. These people are allowed to come to this country to engage in a very limited field of commercial activities for a limited period. Their families are not allowed to accompany them.
Therefore, their status while in this country is uncertain and not suitable for the carrying on of their business in the field of trade between this country and Japan. Accordingly, I should like to request that prompt action be taken to remedy this situation.
(3) Other measures to be taken for the promotion of trade between Japan and Australia
As I mentioned before, the trade between Japan and Australia, since its resumption after the end of the war, has undergone a steady and remarkable expansion, and now Japan is the third best customer for Australian products, her purchase in the past fiscal year being 58.5 million pounds, while Australia’s purchases from Japan last year reached 18.4 million pounds.
Nobody can entertain any doubt on the fact that the trade between the two countries is largely complementary, and this trade pattern, we believe, will remain unchanged in the foreseeable future.
International trade, which is essentially a two-way undertaking between the two countries concerned, can be developed more satisfactorily if the trade is carried out on a balanced basis.
Our past experiences clearly indicate that the more balanced it is on a fair and equitable basis, the better the results we can expect from it. Therefore, it is earnestly desired that Australian purchases of Japanese goods be increased so as to make the trade imbalance between the two countries at least much smaller than it is today.
Accordingly, we wish to take up in the present trade talks the discriminatory restrictions on the importation of a certain number of Japanese goods specified in the Reserved List. From the viewpoint of protecting Australian industries, not only Japanese products but also any imports from any country can be equally harmful in case of an abnormal influx in domestic markets. We cannot see the reason, therefore, why such discrimination is being imposed only on Japanese products.
There may be some other problems the Australian representatives wish to take up. We shall be quite ready to discuss those matters also.
And thus, we sincerely hope, the present talks, though informal and purely exploratory, will prove to be most constructive and profitable for the promotion of our mutual trade.
_
1 See Document 118.
2 See Paragraph 3 of Document 125. _
[AA : A1838/278, 3103/10/2, iii]