91 Record Of Conversation By Upton

17th November, 1954

CANBERRA

Trade with Japan Mr Shaw conveyed the Secretary's regrets that he was unavoidably detained at discussions with Mr Malcolm MacDonald. [1]

2. He then handed over a note advising that the Government was willing to enter into talks with Japan to examine mutual trade problems. Mr Shaw said that the Prime Minister proposed to make a statement this evening and showed Mr Nishi the text of the proposed statement.

3. Initially Mr Nishi showed no definite reaction to the note nor the press statement but after some hesitation, remarked that they appeared to mark a step forward.

4. He enquired about the wording in the statement 'whilst the proposed trade talks with Japan would bear the GATT position in mind'. [2] It was explained to him that the proposed talks would be bilateral and completely outside the GATT but we could not entirely ignore in these talks the fact that Japan wished to accede to the Agreement to which Australia was a contracting party.

5. Mr Shaw said that preparations were being made by the Australian authorities for talks but no decisions had been made on time, place or scope. It might be some time before we were ready especially since the Ministers for Commerce and Agriculture and Trade and Customs together with their permanent heads and senior officials were now in Geneva. Our Departmental view was that Canberra was the most suitable place. We assumed that the talks would include discussion of tariffs.

6. Mr Nishi commented, regarding timing, that many of Japan's trade experts would be in Geneva after 1st February. It might be possible to have some informal discussions before formal talks started. Tariffs and licensing were of main concern to Japan.

However the Japanese Government as a matter of policy favoured comprehensive commercial treaties and talks might cover more than just tariffs and licensing.

7. Mr Shaw said that there might be an announcement soon on new import licensing procedures which would provide Japan with increased opportunities to compete. This action would be taken independently of the proposed trade talks. As regards commercial treaties the Australian Government did not generally favour them.

8. Then Mr Nishi said he could not understand why the level of actual imports was so much less than the level of licensing. Mr Shaw mentioned the time lag and the possibility that licences issued for imports from Japan were not used by importers. Mr Nishi specifically requested details on this latter point.

9. He said that one matter which his Government might wish to take up was the establishment in Australia of branches of Japanese firms. Mr Shaw said he understood that it was relatively easy for foreign businessmen, including presumably Japanese, to enter Australia for periods of some years to operate bona fide businesses. He would, however, make enquiries.

10. Mr Nishi then said that a specific case had arisen with respect to the Tokyo Bank, successor to the Yokohama Specie Bank.

An application had been made to the Commonwealth Bank a little over a year ago to open a branch in Sydney. This application had been turned down. It was not expected that a branch of the Tokyo Bank would compete to any appreciable extent with banks already established in Australia. Japanese woolbuyers would, however, welcome the credit and other facilities which could be provided by a branch of the Tokyo Bank in Sydney. Mr Shaw said he would make enquiries on this matter.

11. In conclusion Mr Nishi said that he would seek advice from his Government on the question of the proposed trade talks.

1 UK Commissioner-General for South-East Asia.

2 See Document 92.

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