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Visit to Japan

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Statement by the Minister for Primary Industry, Honourable J . D. Anthony

The Japanese wool textile industry recognized that it would not be to its ultimate advantage to have a price policy unhelpful to the Australian woolgrower.

The Minister for Primary Industry, Mr. Anthony, said this in Sydney today on his return to Australia after discussions in Tokyo with the Japan. Wool Spinners s Association and the Japan Wool Importers' Association.

Mr. Anthony said some of the main points - emerging from the discussions were:

Australia and Japan had a strong, common interest in the maintenance of a sound wool-growing industry.

The textile industry in Japan remained opposed to any departure from the free auction system, but now was aware of the strong possibility of a change in the selling system in Australia.

The Japanese said they could pay higher prices for wool if the prices they received rose..

The Japanese gave an unqualified assurance. that they did not buy in collusion to keep prices down.

The Japanese were confident about the capacity of wool to meet competition in the future from other types of fibre.

And they acknowledged the value of objective measurement as an aid to wool-selling.

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Mr. Anthony said. ' t The Japanese want an effective wool-growing industry in Australia which can continue to supply the raw material they must have.

"At the same time, the Australian woolgrower is conscious of the importance of the Japanese market, which gets more than three-quarters of its wool requirements from Australia, representing about one-third of the Australian clip.

"Within a very few years — perhaps by 1975 -Japan will be taking half our clip. Her wool imports from all sources now total about 2.5 million bales. This figure could reach 3 million bales in five years' time, and is expected to continue to rise."

Mr. Anthony said his meeting with the top Japanese spinners and importers had been extremely useful. His earlier discussions with executives of the international Wool Secretariat in Japan had reinforced his view that it was important that he discuss with the Japanese possible changes in Australia's method of selling wool..

"I told the Japanese that there was concern in the Australian wool industry, and that growers were demanding quick and effective action in an effort to meet the crisis precipitated by the lowest wool prices in more than twenty years, ' r he said.

' tl said it was important that I know how our biggest customers felt about this situation so that I would be in the best possible position to deal with the matter when the Government considers, as it will, whatever firm proposals the industry puts before it.

"The six spinners at the Tokyo meeting soon will be buying a million bales of wool from us annually, so we must be aware of their views."

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Mr. Anthony said the Japanese were sympathetic about the plight of the Australian grower, but they also expressed concern about their own position.

The Japanese put low wool prices down to

the changing supply and demand situation for textile fibres, caused mainly by growing production of synthetic fibres of better quality at falling cost, coupled with stability of supply

and greater , manufacturing facility

the high cost of money throughout the world, which inhibited buying and stockpiling of wool and which had a dampening effect on consumer buying

competition in end-use product prices, which bore down on the price that could be paid for wool.

Mr. Anthony said "The Japanese pointed to their

developing labour problem and to their wage level, which has been rising by an average of 18%. a year recently.

"I argued that the existence of a profitable wool industry in Australia was vital to the Japanese industry, and this point was accepted.

"The Japanese claimed there was a false impression in Australia, based on present wool price levels, as to the profitability of their industry, and argued strongly that they were not in a position to pay a higher price unless there was a corresponding increase in the price they received for the end products they manufacture.

"I mentioned the various measures now under consideration in Australia to streamline the handling of wool to reduce costs, but said I believed the Australian grower would not be satisfied with these measures alone, and would demand a much quicker

attack on his low-price problem.

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"I believe I left no doubt in the minds of the Japanese that there was a very strong possibility of change in Australia, and I undertook to advise them of developments in this direction.

"They, of course, re-affirmed their strong support for the free auction system, and expressed their opposition to change."

Mr. Anthony said he had told the Japanese of the strong feeling among many Australian wool industry people that Japanese buyers acted in co-operation or collusion to keep prices down at auction.

"They strongly contested this and, in fact, gave me an unqualified denial that they engaged in any form of collusive buying," he said.

"This declaration was made as part of a quite long discussion on this topic.

"The Japanese industry representatives asked me to bring to the attention of the Australian grower their concern about this suggestion of collusion, and their forthright assurances that there was no collusion.

"They claimed that, with 14 or 15 buyers operating on behalf of many companies, there was strong competition and no room for collusion.

"These assurances and statements were given to me by the leaders of the Japanese wool spinning and importing industry.

"I accepted them. "

Mr. Anthony said he believed his discussions in Tokyo, both with the International Wool Secretariat and the Japanese industry, had been of very great value.

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"The Japanese, for their part, obviously were very glad

of the opportunity for discussions at high level in a very frank, forth-right meeting," he said.

"This was the first time the industry had had such a discussion with an Australian Minister. "

Mr. Anthony was joined in the discussions by the Secretary of the Department of Primary Industry, Mr. W. Ives; the Managing Director of the International Wool Secretariat, Mr. A. C.B. Maiden, and the Asian Director of the I. W . S., Mr. K. C. Clarke.

He also held discussions on a range of subjects with the Japanese Ministers for Agriculture and Fisheries, International Trade and Industry, and Finance.

Sydney, 10th May 1970.