166 Cablegram From Stuart To Department Of Trade

5th November, 1956

TOKYO

360. At a social function Saturday evening talked to Yoshino, Chief of the Sterling Area Section, Economic Bureau, Foreign Office, who is instructing trade talks Delegation.

2. No Trade bag arrived this week and I was embarrassed when Yoshino gave me the first news of amendment to the Customs Act to provide safeguards against Japanese 'dumping' and promised to send me full text of Debate. [1]

3. Yoshino asked why the amendment necessary while Australia continued 'quotas'-that is anti-Japanese licensing restrictions. I said quotas followed Cabinet decision only whilst tariff safeguards required Parliamentary approval which could not be obtained at short notice. For this reason Legislative safeguards had to precede executive elimination of quotas. In addition Legislative safeguards essential internal political prerequisite to concessions. I think he appreciated a point on which he was previously confused.

4. Similarly Yoshino said Australia had asked for Japanese 'self- restraint' export restrictions to prevent flooding Australian market. This request created internal political differences in Japan. In particular M.I.T.I. and exporters considered this completely unreasonable while quotas continued. M.I.T.I. felt Australia wanted three safeguards-tariff, quota and self- restraint. I said that I did not think we wanted self-restraint on quota items but we required acceptance of principle as prerequisite to quota elimination. Again Yoshino appeared to understand a point on which he was previously confused.

5. Yoshino said Australia was pressing on wheat but Japan could do nothing during the present United States surplus program. When I said I appreciated this and that programme ran until 30th June, he seemed doubtful and gave the impression something could be done earlier.

6. Yoshino agreed Australian barley Japan's best buy but suggested 350,000 tons excessive in the light of relations with North America.

7. Yoshino went out of his way to say Japan appreciated Westerman leading for Australia because it showed the importance we attached to the negotiations.

8. My general impression Yoshino ready anything remotely reasonable (including self-restraint and wheat) to get some quota concessions from Australia.

9. Sir James MacGregor [2] left for Australia Friday. He confirms my opinion already reported that present wool allocations quite inadequate for the needs of the Japanese industry. Unless increased he believes serious difficulties will appear first quarter 1957.

1 See Document 153.

2 Wool exporter and former Chairman of the Australian Council of Woolbuyers.

[AA : A1209/23, 57/5473]