In accordance with the agreement reached at the conclusion of the discussion with the Minister in Melbourne on 5.3.57, Mr Burgess submitted a statement which had been prepared by the Association.
2. Mr Burgess said that the statement had been prepared on the basis of the Minister's assurance that Dr Westerman would examine the Association's proposals that 'quantitative restrictions should be applied to imports of textiles and clothing from Japan of the type produced in Australia'.
3. Mr Burgess said that his Association's request was that quantitative restrictions should be applied to the following Japanese goods, imports to be restricted to the quantity of each individual item imported from Japan during the year ended 30th June, 1956:
Denims, drills, dungarees and jeans, cotton tweeds and furnishing fabrics covered by Tariff Item 105(A).
Artificial silk piecegoods and ribbons covered by Tariff Items 105(D), 106(B) and 107(A).
Apparel covered by Tariff Item 110.
Canvas, duck and towels covered by Tariff Items 120 and 130.
Cotton yarns covered by Tariff Item 392.
4. Mr Burgess said that his Association's request was made in their belief 'that on its acceptance hinges the survival of the Australian textile and clothing industry'. He then went on to say that the emergency power set out in Section 11A of the Customs Tariff (Industries Preservation) Act  would not prove effective and that it was no satisfactory substitute for quantitative limitation or adequate tariff protection.
5. After concluding his statement, Mr Burgess submitted a further statement which purported to be a record of the discussions which had taken place in Melbourne on 5.3.57.
6. Dr Westerman said that the Minister had not given any assurance that a further request for discriminatory quantitative restrictions would be examined. In fact, he had made it quite clear that there could be no treaty with Japan which provided for quantitative restrictions on Japanese textiles and textile products. Mr McEwen had said that the further submission to be prepared by the Association would be examined in the context of the line which we had adopted in our discussions with the Japanese (which had been outlined during the talks in Melbourne). Dr Westerman, in continuing, said that if discriminatory quantitative restrictions were under consideration-which they were not-it would be impossible to select a base period during which Japanese textiles had been denied reasonable access to our market.
7. It was quite clear that the Association had virtually ignored the policy statements which had been made by the Minister in Melbourne and, in some respects, they had been distorted to form the basis for continuing with the request for quantitative restrictions and for the purpose of keeping members of the Association advised of 'progress' in the discussions.
8. The way in which the effectiveness of the emergency power is discussed in the Association's statement is also a distortion of the Minister's remarks. Mr McEwen had said that he regarded the emergency power as a measure to hold the line only should its use prove necessary. The long-term solution to any serious problem (if it arose and was not corrected by the Japanese) lay in appropriate action through the Tariff. This was not brought out in the Association's statement, the whole implied tenor of which is that we will be swamped with a damaging inflow of imports from Japan and that we will have to rely straight away solely on the emergency power. Dr Westerman pointed this out to Mr Burgess.
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11. It is understood that Mr Burgess and Mr Flanders lobbied around the industry before the interview with Dr Westerman stating that all hope was lost, the industry was ruined and that all that remained was to kick the Department. The 'record' of discussions in Melbourne was distributed to members of the Association and (presumably) the statement submitted by Mr Burgess. Both of these documents would lend colour to the claims of Messrs. Burgess and Flanders.
12. After the discussion with Dr Westerman, Mr Burgess spent the rest of the afternoon in my room dilating on the irreparable ruin with which the industry was faced. Before leaving, he asked that denims and drills, rayon piecegoods and cotton canvas and duck be referred to the Tariff Board. (He has since confirmed this request in writing). I explained that we were still considering the last report on denims and drills and it would hardly be appropriate to make a further reference to the Board until that report was tabled. Prompt consideration would be given to the requests on rayons and canvas and duck, In the light of the Minister's statements during the interview in Melbourne it is recommended that these items be referred to the Board. Draft references have been prepared.
13. The claim by the Association that only quantitative restrictions can protect the textile and clothing industry from being ruined by Japanese competition rests on three assumptions- that the Japanese are incapable of or unwilling to carry out any assurances they may give us regarding the supervision of exports at their end, the ineffectiveness of the emergency power and the impossibility of devising any appropriate long-term form of tariff protection. These assumptions are quite untenable.