230 Minute From Durie To Menzies

29th August, 1957

CANBERRA

Japanese Trade Agreement-Deputation from ACMA For your meeting with ACMA this afternoon, Jones has prepared the attached papers. They comprise:

(a) A general note;

(b) A brief outline of the provisions of the Agreement;

(c) A commentary on the particular points made in the ACMA letter.

[1]

Also attached is a copy of the letter from the Chambers and a copy of the Agreement.

The following observations may be helpful in determining the response to the deputation.

(1) Tariff Protection Policy. It would be reasonable to say that this is not an entirely relevant argument. Whether or not manufacturers are dissatisfied about the Government's general tariff policy and the recent treatment of individual Tariff Board reports, is not a principal factor in considering the Trade Agreement with Japan. In any event, Mr McEwen has already said publicly that these matters are being considered and no doubt he would welcome the considered views of the Chambers of Manufacturers on this problem.

(2) Emergency Action under the Agreement. This appears to be the key to the complaint. The Chambers have either misunderstood or do not accept Mr McEwen's assurances that the Agreement entitles us to take emergency action in certain circumstances. The fact is that if the Agreement does not allow emergency action, then the whole Agreement must be regarded as one of the most successful confidence tricks of all time.

However, I imagine that the real concern of the Chambers is their expectation that Mr McEwen will be unwilling rather than unable and in the event the Chambers will undoubtedly claim that they were right in their expectations because they will produce individual cases where, in their view, emergency action was clearly needed but the Government failed to act.

There are, therefore, two aspects of the problem. The first is that clearly the Government has a right to emergency action; the second is that the Government is not going to be panicked into using that action every time the Chambers of Manufacturers make a claim. The Agreement has got to be given an opportunity to work and it would perhaps be as well to be quite frank in putting it to the Chambers that the Government would expect that the use of the emergency provisions would be the rare exception.

(3) Japanese Voluntary Restraint. It will not be possible now or in the future to convince the Chambers of Manufacturers that this is a worthwhile provision and that Japanese intentions are honourable. The Government could be well satisfied that the provision is working effectively, but it only takes one manufacturer to claim that Japanese imports have put him out of business and the undertaking is discredited. There will be references to Canadian experience where the Government and officials have been well satisfied with the arrangement, but not manufacturers, and the case just cannot be proved. It is only left to us to emphasise our belief in the efficacy of the arrangement and the Government's view that this provision is an integral part of the Agreement and if it does not work to the Government's satisfaction, the whole Agreement is invalidated.

1 Document 229.

[NLA : MENZIES PAPERS MS4936/21/439, FOLDER 16]