Trade and Tariff Negotiations with Japan In previous consideration of the problems associated with Japan and GATT it was proposed to ask Mr McEwen and Senator O'Sullivan for their views on Submission No. 153.  Their views have now been received and are attached for consideration together with an introductory statement by the Departments concerned.
TRADE AND TARIFF NEGOTIATIONS WITH JAPAN After the problem of accommodating Japan in GATT had been discussed at the Commonwealth talks in London, Mr McEwen and Senator O'Sullivan cabled a recommendation that bilateral talks with Japan be opened as a matter of urgency. (See GATT 2  attached).
2. Following receipt of this cable the Interdepartmental Committee prepared a report for Cabinet (Submission No. 142).  This report discussed the possible alternative types of bilateral agreement with Japan (Canadian type and quota principle type) and outlined the difficulties which would confront Australia in an agreement.
3. The Acting Minister for Trade and Customs has circulated to Cabinet a further Submission (No. 153) which contains proposals for:
(a) Partial assimilation of Japan into the non-dollar licensing system, subject to prior consultation with the Ministers abroad;
(b) Trade and tariff negotiations with Japan-the papers presented the matters which it was considered had to be faced before the decision could be taken to commence trade and tariff negotiations.
Some experience of more liberal trading conditions was considered necessary before we could know whether a basis for tariff negotiations existed.
4. Cabinet decided to seek the views of the Ministers abroad on the proposals contained in Cabinet Submission No. 153. In the meantime, a small Committee of Ministers examined the selected tariff items under which Japan is a significant or potentially significant supplier to Australia. This Committee decided that it was not in a position to make a precise recommendation to Cabinet until the comments were received from the Ministers abroad on Submission No. 153.
5. Mr McEwen and Senator O'Sullivan have now given their comments in some detail in Cable GATT 8  (attached). In brief, they recommend:
(a) The intention to commence tariff negotiations can and should be announced immediately. The Ministers are of the view that it is entirely unnecessary to have completed the detailed study of the tariff items before this decision is taken.
(b) The adoption of the assimilation proposals, subject to variation in the treatment of contentious items (see paragraph 3(b) of GATT 8).
6. Senator Spooner cabled the Ministers on Monday asking for clarification of some aspects of the Ministers' recommendations on import licensing (see Cable 256 attached ). An answer to this Cable has been requested for tonight's meeting.
7. UK Proposals: The United Kingdom has advised us of the proposals they have made to Japan. Cables giving the United Kingdom proposal (B4)  and the preliminary Japanese reply (B5)  are attached for information.
8. Points for Decision:
(a) announcement of willingness to commence trade and tariff negotiations (paragraphs 1 and 2 of GATT 8).
(b) licensing treatment (paragraph 3(b) of GATT 8).