211 Letter From Mcewen To Fadden [1]

14th June, 1957

CANBERRA

The Committee of Ministers looked at the position of the trade negotiations with Japan on 16th May last and approved recommendations which would enable the delegation to conclude the negotiations. [2] The position now is that within a few days a complete text should be agreed at the official level with the Japanese. This process is likely to be completed about 19th or 20th June in Canberra by the leaders of the two delegations, and further alterations would then be ruled out.

I have accepted the invitation of the Japanese Government to visit Tokyo early in July to sign the Agreement. I attach considerable importance to this, because so much of the success in operating the Agreement without generating friction will depend upon restraint by the Japanese authorities in developing their export programme to Australia. This understanding must be brought home in Tokyo at top political level and this is really not achievable except on a personal basis between Ministers. This is the course the Canadians followed with success.

Broadly, the agreement now in sight is very much as depicted in the discussions on 16th May. There are perhaps two points I should mention. On surplus disposal, the delegation had earlier reported that Japan would consult before concluding any agreement with the U.S.A. for the importation of surplus U.S. commodities affecting Australia's export interests. In the event, the maximum commitment we look like securing is that 'on request' by us at any time, we would be able to talk to the Japanese-and they would give us information-regarding a surplus transaction with U.S.A. This is not as much as I had hoped for, but it will provide a basis for entry into talks when Australia considers such talks necessary, and should in practice give us opportunity to put our views before the Japanese are committed. This is the first time we have secured this kind of undertaking from any foreign Government and it is the first time the Japanese have given such a commitment. They rejected, they tell us, any kind of undertaking on surplus disposals in their negotiations with Canada.

On the other hand, on 'emergency action' to protect Australian industry against serious damage from imports from Japan, the delegation has managed to avoid falling back (as they were authorised to fall back) to the position where the Japanese would have the right to take retaliatory counter measures if Australia imposed discriminatory import restrictions.

As the total agreement now in sight does not depart significantly from what we envisaged in our discussions in mid-May, it does not appear necessary for the Cabinet Committee to meet again before I authorise the Australian delegation to conclude negotiations.

Details of the agreement will, I expect, be released simultaneously in Canberra and Tokyo after signature. However, there will be some points in connection with the commitments or understandings reached with Japan regarding our export commodities and the arrangement on surplus disposals which the Japanese will not wish to be published. As soon as practicable, I will be making the full text of the Agreement available to Cabinet.

1 Fadden was Acting Prime Minister as Menzies had departed on 27 May for the Commonwealth Prime Ministers' Conference in London.

The substance of this letter was cabled to Menzies at sea, with the additional information that a short summary of the Agreement would be passed to the UK Government by the High Commission in London. The summary would include advice that provisions of the Agreement would not debar imposition of special duties on Japanese imports if necessary to prevent 'a sudden and serious disruption of the pattern of import trade from preferential suppliers'.

2 See Document 209.

[AA : A1838/283, 759/1/7, vii]