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FOR PRESS

7?G

•JAPAN VISIT SUCCESSFUL

(Statement by Rt. Hon. J. HeEwen, Deputy

Prime Minister and Minister for Trade).

The successful signing of the new Australia-Japan

Trade Agreement which was announced in Tokyo last Monday,

was a further important step in the development of trading

relations between the two' countries, the Minister for Trade, .

Mr. J. MeEwen, said today. '

Mr. McEwen returned to Sydney after a six day visit

to Japan during which he signed.the new Trade Agreement after

final talks last weekend with senior Japanese Ministers.

Mr. McEwen said that the new Trade Agreement was a

product of long and detailed negotiations bet'.veen the Japanese

and Australian Governments. It now superseded the original

Trade Agreement which lie had signed in 1957· Mr. McEwen

saidi "In 1957, Australia in common with many other countries

(United Kingdom, France, New Zealand, etc.) was not able to enter

into a full trading relationship with Japan, which is usual among

countries which are members of the G.A.T.T. "

"For one thing, Australia had to reserve the right to

take special action if necessary to protect her industries from

excessive imports. Again, because of the system of controlling

imports in Japan, we were not guaranteed complete access for our

important export commodities into the Japanese market. It was

necessary to ensure that we would obtain .fair and equitable access.

"Tie therefore negotiated the Agreement in 1957, taking

these matters into account, although we undertook to examine during

the currency of the Agreement, the possibility of according to

Japan the same rights as. Australia accords to other members of

"the G.A.T.T. . · · . · . ' ■

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1 1 In its six years of operation, the 1957 Agreement has

been successful, Japan has become established as Australia's

second export market and there is every promise that exports

to Japan in the future will be even more important than today.

. "Japanese exports to Australia have increased fivefold

since the Agreement was signed. This has been achieved without '

harm to Australian industry, largely due to Japan's effective

system of orderly marketing or voluntary restraint.· .

"During the period when Australia was not prepared to

accord full and formal trading relations with Japan, the 1957

Agreement provided for a very effective and satisfactory increase

in trade between the two countries. '

"During the negotiations which have just concluded, it

has been agreed that Australia and Japan will now extend to each

other the full rights and privileges accorded to members of the

G.A.T.T. This will become effective when the new arrangements

which we have just signed enter into force after ratification by

the two Governments.

"Basically, the new arrangements provide that imports from

each country into the other will be governed only by tariffs.

This is the basic provision of the General Agreement on Tariffs

and Trade.

"This is, of course, of major importance to Australia

since Japan has become a market of importance to us, second only

to Britain.

"The other significant point is that under this new

Treaty, neither' country reserves the right to discriminate against

imports from the other country. Prom Australia's viewpoint, I

am quite satisfied that the provisions available--to us equip us ·

with completely adequate safeguards against imports from all

countries and. to this extent .will safeguard Australian' industry,

if necessary, against imports from Japan. Japan lias also ·

relinquished the right to discriminate against imports from

Australia,. . ■ .

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"I feel that there isnot 'wide enough recognition of the

fact that if each country actively pursued policies of discrimin­

ation, Australia would have far more at risk than Japan.

"Under the new arrangements Japan will continue to

consult with Australia when requested, on the requirements of

orderly marketing to avoid harm to Australian industry. That

is to say, Japan will consult with Australia to see that action

will he taken in Japan, if necessary, to safeguard Australian

industry. This means that the system known as "Voluntary

Restraint" will continue as it has since 1957· To make this

system fully effective the Australian Government will advise

the Japanese Government and enter into consultations with it when

it appears likely that the question of protection of any

particular Australian industry against imports from Japan is

likely to arise.

"So far as access into Japan is concerned, a very important

concession has been given in respect of wool. The Japanese

system of controlling imports, enables that country to use such

restrictive devices as prior deposits, import restrictions,

foreign exchange restrictions and other administrative devices.

Japan has undertaken that none of these will, be applied to imports

of raw wool unless the same action is taken at the same time

against imports of raw cotton. Cotton is a commodity which is

very important to the Japanese economy. It contributes

substantially to Japanese export Inc'ome. For this reason this

concession is very important to Australia because it ensures

that our major export to Japan w’ ill not be" singled out for any

non tariff type of action, unless the same action is taken

against cotton. For reasons I have given, it is unlikely the

Japanese would ever take any of these' actions against cotton.

"Japan has also undertaken to maintain the level of

imports of Australian soft wheat. Last year Japan imported

over 330,000 tons of F.A.Q. wheat from Australia. At the same

time it has been, agreed that the two countries will discuss the

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possibility of getting rid of the price differential in the

Japanese internal trading system which could discriminate against

imports of Australian soft wheat if we had not received this '

present quantitive commitment. -

■ "Japan has also given undertakings on all products, with

one exception, which are of export interest to Australia and which

are still on the restricted import list in Japan. ihe one

exception relates to the import of 'oeef. .

"The Japanese Government is endeavouring to encourage the

production of "beef in Japan and for this reason has felt unable to

give access, restricted only by the tariff, or an annual quota

satisfactory to Australia. The Australian Government is not

prepared to record acceptance of an import quota for beef which is

regarded as inadequate, and has preferred to retain its freedom to

argue this matter with Japan, as with other importing countries,

in the wider negotiations that are currently being carried on in

Geneva under the auspices of the Kennedy Hound of tariff ■

negotiations.

"Our failure to reach agreement on this point does not

mean that Japan will" not be importing beef from Australia. To

the extent imports are permitted, we have been assured most

favoured nation treatment. Furthermore it will not inhibit the

question of the import of beef into Japan being raised at any

time during the annual consultations provided for in the Agreement.

"So far as all other commodities of real export interest

to Australia are concerned, we are now assured of Most Favoured

Nation and non-discriminatory access into Japan. Japan, in

particular, has undertaken tor make every effort to_increase access

for our sugar, leather, canned meats, butter and cheese. ■

"Japan has not imported barley duringthe last few years

but has undertaken to give Australia non-discriminatory treatment

when barley is being imported. . '

"The same concession applies to motor vehicles for which '

■ the Australian manufacturers see prospects in Japan.

• "Our exports of ores and .minerals to Japan, have increased

substantially and very satisfactorily during the last few years,

and under these arrangements Japan specifically recognises

Australia's position as an important producer - and therefore

supplier - of ores and minerals. This highlights the position

of those Australian commodities in undertakings Japan has given

to accord Australian commodities non-discriminatery treatment

and not to impose any new import restrictions for other than ■

"balance of payments reasons.

"As I have mentioned, there is provision for annual

consultations "between the two countries. The recorded objective

of these consultations is to increase the trade between the two

countries. I feel that this consultation provision is very

important. Japan has become a very important trading partner

to Australia. Australia is an important supplier of foodstuffs

and raw materials for Japanese industry. .

"Our imports from Japan have likewise increased since

1957· Japan is particularly interested in increasing exports to

Australia. There is a wide understanding both in Government and

business circles in Japan that the best opportunity is in items

which do not compete with Australia's own industries. Already

she has made progress in the export of heavy engineering and

capital equipment. Annual consultations will not only permit

trade to be expanded but also minimise the problems of harm to

Australian industry. -

"The Treaty provides that its term shall remain firm for . _ η ? · ' · ' · ··· ■ . - " ■

three years and will then continue indefinitely with provision

that both parties may jointly agree to review any of the conditions.

■ Mr. McSwen said that he was quite satisfied with the terms

of this new Agreement. He had been impressed by the success of the

1957 Agreement. He was satisfied that the new arrangements would

provide a framework for the· long term'development of trade between

Australia and Japan in an atmosphere of mutual profit and goodwill.

SYDNEY. August 9th. 1963. U/ljT