29th August, 1956
CANBERRA
1. The Australian objective is an agreement which will ensure opportunity for each country to market its goods in the territory of the other under fair and stable conditions of trade.
2. In the Australian view, such an agreement would contain a number of reciprocal undertakings, and would be supplemented by exchange of notes on particular matters.
3. With regard to the treatment by Japan of goods imported from Australia, the Australian Government requests:-
(a) Most-favoured-nation treatment with respect to customs duties and other charges affecting imports and with respect to rules and formalities affecting imports including the application of internal taxes and charges affecting internal sales, distribution and use of products.
(b) Non-discriminatory treatment in import restrictions, foreign exchange matters and State-trading operations.
4. In the course of negotiations the Australian Government will seek specific undertakings on the part of the Japanese Government designed to give practical effect to paragraphs 1 and 3 above.
Thus Australian requests include:-
(i) In relation to import licensing and/or exchange control- (a) in respect of all goods imported from Australia, the continuation of treatment not less favourable than that now accorded;
(b) the inclusion of particular commodities such as raw wool, beef tallow, cattle hides, in the Automatic Approval category. Raw wool here includes greasy, scoured and carbonised wool, skin wools and slipe, tops, roving waste and waste of greasy wool;
(c) provision for the issue of import licences for goods such as dried fruit when imported from Australia;
(d) in respect of other products, such as wheat, barley, sugar, dried skim milk, guaranteed minimum import quotas together with guaranteed opportunities to supply not less than stated percentage shares of imports into Japan.
(ii) In relation to tariffs:-
(a) the binding of duty free entry on wool;
(b) amendment of the present item in the Japanese Customs Tariff relating to sugar to provide that Australian raw sugar of less than 99polarisation be subject to the same rate of duty as sugar of less than 98 polarisation.
(iii) In relation to possible receivals from third countries of surplus commodities of a kind exported by Australia, an undertaking to consult with the Australian Government before entering into arrangements with third countries for such receivals; and recognition that for the purposes of the proposed trade agreement between Australia and Japan imports of products under concessional, noncommercial or other special terms are to be regarded as imports for the purposes of 3(b) and 4(i) above. [1]
5. The Australian Government will also wish to discuss relevant
trade or economic policies of the Japanese Government as they may now or in the future affect the importation into or consumption in Japan of commodities in which Australia has a major export interest such as wool or grains, and in this respect will seek assurances in an appropriate form to safeguard Australia’s interests in the Japanese market.
6. It is contemplated that in respect of commitments in the field of import licensing or exchange controls, the proposed trade agreement will contain balance of payments escape clauses and provisions for consultation in respect of the treatment accorded particular products.
7. It is proposed that matters relating to the content of the proposed agreement apart from matters referred to above should be discussed in the course of negotiations.
8. The foregoing requests are subject to later additions, deletions, or other amendment.
EXPLANATORY NOTE In accordance with the note presented to the Japanese Embassy on 25th May 1956, by the Department of External Affairs [2], this request list is confined to those matters which affect Australia’s exports to Japan. The Australian aim in these negotiations is an agreement which will provide a general framework for the trade between Australia and Japan and to achieve this it will doubtless be necessary to consider a number of other questions as well as tariff and import licensing treatment and other matters mentioned in the Australian request list. However, we consider that other matters which we may wish to include in the agreement may be conveniently left to a later stage of the negotiations.
General principles of most-favoured-nation and non-discriminatory treatment are set out on para 3 of the Australian request list. In the light of Japan’s import and exchange controls, we do not think that the principle of most-favoured-nation treatment can be made fully effective in actual trade unless there is also nondiscriminatory treatment in import licensing; and that the broad undertaking of nondiscrimination in import licensing needs to be given more precise meaning in terms of its actual application to individual Australian products. The requests in para 4 are therefore designed to provide the necessary practical interpretation of the principles set out in para 3 (b) and (6).
As regards the minimum quotas mentioned in para 4 i (d) we expect to be able to specify the quotas required in the course of the negotiations.
We do not wish the requests presented here to be regarded as in any sense a final list, even in relation to the treatment of Australian export commodities, and as is stated in the request list, we may wish to make amendments to it as the negotiations proceed.
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1 Brennan’s comment on paragraph 4(iii), recorded in a note attached to the file copy, was that ‘we would be asking for something which we had anyway but for which the Japanese would be entitled to request some quid pro quo if they granted it to us’.
2 Document 138.
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[AA : A1838/283, 759/1/7, iv]