Your S.15  and S.16.  Extraterritoriality.
1. Minister considers that attitude of Chinese as evidenced by their counter-draft demonstrates need for utmost caution in this matter and feels now that even on basis of your draft the Treaty would be liable to misinterpretation in Australia.
2. Commonwealth Government will definitely not agree to inclusion of Articles 5, 6 or 7. While there is not the same objection to 6 and 7 as to 5, your view is agreed with that we cannot go on with 6 and 7 (even if modified) and reject 5. In circumstances, to avoid embarrassments which seem certain to arise if negotiations continue on present basis, Minister desires simple exchange of Notes setting out in simplest declaration that Commonwealth Government regards the Treaty concluded on 11th January, 1943, between His Majesty the King and President  in so far as it refers to question of abrogation of extraterritorial rights, as governing the mutual relations of the Commonwealth of Australia and China.