PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 2415


Photo of McMahon, William

McMahon, William

Period of Service: 10/03/1971 to 05/12/1972

More information about McMahon, William on The National Archive website.

Release Date: 06/05/1971

Release Type: Speech

Transcript ID: 2415

Spechbthe Prime Minister, Mr. William McMahon
Mr. Chairman, Ladies and Gentlemen,
Now may I make some comments to you formally. And the first I would
like to make, and I will put it in three different classifications, is the importance in
aim trpaodritnagn csee nthsaet oJfa pJaanp acna nto pulas, y tahse ai mpoploitritcaanlc ein folfu eJanpcaen foinr at hwe orrilgdh ctso notfe xtht ea npde oapllseos tohfe'
South East Asia. It is probably well known, but it bears repetition, that within the course of
the next ten years, Japan will be, undoubtedly, the second greatest production nation
in the world. And in order to be able to sustain its continued growth, it must have
access to raw materials, semi-processed materials and, I believe, a large range of
manufactured items as well.
Thus it necessarily follows that Japan, in order to be able to sustain its
production and its trade, must be able to obtain raw materials from various parts of
the world. There can be no doubt that Japanese businessmen will be looking increasingly
at Australia as the source of raw materials and processed materials.
The second point is that as Japan's economic growth continues, and as it
increases its trade in Asia, including South-East Asia and further South, it must be able
increasingly * to play an important part in the development of the countries with which
it trades. And so too should it be able to play a part in parallel with other countries
in qnsuring that the less developed countries of South-East Asia have the opportunity
for development. And the last assumptions on which I want to base my subsequent remarks
are,: That as Japan develops its industrial strength and its trading strength as well,
it will increasingly be able to play an important political role in the development of
Asia, and particularly those parts of Asia closest to our shores.
Consequently, we want to be able to join with the Japanese in order to ensure
that Japanese political activity is directed towards ensuring the political freedom and
the physical freedom of the countries of South East Asia. And that increasingly together
we can make our contribution to helping the poorer people of this part of the world.
Now while we as a Government can create an effective and real atmosphere
or milieu in which development can take place, nonetheless, it is you as businessmen
who can go out, seek the contacts with the political, and industrial and commercial
people, and be able to achieve the kind of ideal I have just mentioned. That is increasing
trade and with that increasing trade, increasing understanding and with that increasing
understanding a higher responsibility for helping others in order to help themselves.
Fortunately for us, trade between the two countries is complementary.
They will be, as I have said be! ore, large importers of rawx materials and processed
materials, and we will in our turn be able to import from them large quantities of
highly sophisticated industrial eqa. ipnent. / 2


If we look at the trade between our two countries,, we can, on a preliminary
estimate, get a false impression. Becaus. we have undoubtedly a big surplus in our
balance of payments our balance of trade with Japan. In the latest figures that have
been made available to me, we have, in recent years, increased our trade by about
per cent to Japan, and they have increased their trade from us by about 60 per cent.
So there is very nearly reciprocity at this present moment.
The point I'd like to make, however, is that the Japanese authorities from
the Prime Minister down, recognise that it is in their best interests and our best
interests to have multilateral trade. And they realise that in a multilateral trade
and finance world it is not essential that there should be a balance with every country.
Japan accepts the fact that its balance of payments with us will be adverse,
and probably this adverse balance will increase as the years go by. That does not
mean that both of us don't want increased trade. Of course we do. As I said a few
moments ago you can be absolutely certain that that trade will increase and increase
at a rapid rate. As to the future, I think the first submission that I put up to the Cabinet
or I should state in a preliminary way that I asked the Department of Foreign Affairs to
prepare was the way in which we should look at the problems, the inter-relationships
between Japan and Australia. As a consequence of that submission we have appointed
a high-ranking group of civil servants at-F irst Secretary level or at Deputy Secretary
level in order to be able to co-ordinate the relationships between the two countries.
Equally, too, if I can interpolate this, although it is not exactly relevant
but It has a bearing on what I am saying, we also in recent weeks prepared three
papers for the Government on our relationships with China, particularly improved
trading relationships with them.
I have been able to announce in the House that we will considerably liberalise
our trade with the People's Republic and that the Minister for Trade will shortly be
releasing two lists one of goods that can be exported to the People's Republic, and
one, the Strategic List in which there will be prohibitions imposed on trade.
The substance of this is that businessmen will shortly know exactly the
type of goods they can and the type of goods they cannot export.
May I now refer shortly to three different subjects first capital
movements, secondly, our problems relative to tariffs, and third, if I can mention
It, guidelines for borrowing in this country by overseas interests.
First, then, as to capital movements. I must again interject to say that
in recent months the Japanese Government has indicated quite clearly that it will
liberalise the quota restrictioces that are now imposed. And secondly I go on to say
that as Japan has a very favourable balance of payments surplus, and one that is likely
to grow, and is now in world terms in the financial market in a very strong position,
we wifl welcome the fact that Japanese markets of this kind will be opened up to
Australia. And we can hope for capital movements to increase between the two
countries. In the last three years there has in fact been a movement of direct
investment in Australia by Ja-anese interests of something like $ 43 million.

The second point I want to mention is borrowing capacity by Japanese interests
or Japanese firms that have been established here. This depends on the amount of
Australian equity as well as on the duration or the time during which the Japanese
interests have carried on buiness here.
We have two political objectives. We do want Australian equity participation
when Japanese firms establish here and I know this is well known to the Japanese
authorities, and 1 believe to Japanese business and commercial interests. And secondly
we do like Australian talent, whether it happens to be on an administrative or a technicalI
basis, to be able to participate with the Japanese in the development of Australian projects.
I applaud the statement made by Mr. Miyazawa when he was here a few weeks
ago that the Japanese look forward to co-operation between Japanese and Australian
interests for the development of industry here. I hope we can extend that and extend our
joint influence to the development of Australian/ Japanese interests in other parts of Asia.
The third element is with our tariff policy, and whilst I would never like to
feel I had become involved in controversy with the Minister in control of MITI, I thinkj
I should say here that we have in fact only one kind of restriction on goods from Japan
entering this country.
Virtually we have an open-door policy to import and we do not, except on a
very limited scale, impose quotas or non-tariff policies. But whatever we do, we do it
after a thorcugh-going review by the officers of the Australian Tariff Board and after
recommendations and reports by them to the Government. We do not act unilaterally.
But all of this that I have just mentioned relating to the Tariff Board and
capital movements will be submerged by the fact, and I repeat this again because it is
so critically important there can be no doubt at all that trade from Australia to Japan
and in the reverse direction will increase substantially in the years to come.
We in Australia do want the most friendly international relations with the
Japanese Government and people and the Australian Government and people. And from
all I can gather and I have recently been to Japan as a guest of the Japanese Government
for a period of something like ten to fourteen days, I think I can express the feeling that
there is an increasing desire to be friendly. And not only friendly, but that we should get
to know one another, that tourism should increase and that we should be able more and
more to establish direct contact between the two peoples.
And I finish on this note that while we as a government can do much in
order to provide the infrastructure, the circumstances in which trade can increase,
I do want to emphasise that the businessmen themselves can, and I believe will do the
job. I know of the tremendous industry and the application of sound business principles
particularly in finance and industry of the Japanese. Equally, too, do I know of the
abilities of Australian businessmen as well. I am sure, and I express this view on behalf
of the Government, that you will. make our task easier. But if you ever feel that we
can do something to improve the relationships and to improve the trade between the
two countries, I assure you that everyone in the Government will be only too happy
to participate with you.

Transcript 2415