AUSTRALIA AND JAPAN

Otago Daily Times, Issue 23082, 7 January 1937, Page 12

AUSTRALIA AND JAPAN

TRADE -TREATY TERMS EFFECT ON WOOL MARKET (From-Our Own Correspondent), SYDNEY, Dec. 31. Marked revival of trade between Australia and Japan, particularly, in wool and textiles, is expected from the settlement of the trade dispute. Higher * prices, firming gradually, rather than a spectacular rise, are expected when Japan resumes the buying of wool. The principal provisions of the treaty are:—Australia agrees to import 102,500,000 square yards of Japanese cotton piece and artificial silk goods a year, exclusive of calico for bag-making, which is unrestricted as before. Japan will issue permits for the import of no fewer than 800.000 bales of Australian wool up to June 30, 1938, at the rate of 533.000 bales a year. Each country will remove immediately the special prohibitions imposed against the imports of the other, and Japan will withdraw super-duties, against certain Australian products. The Commonwealth Government will reduce the existing intermediate tariff rates on cotton piece goods, and on artificial silk piece goods. Japanese cotton and artificial silk piece goods will be exempt from primage duty. The Commonwealth decision to import textiles during the currency of the treaty is dependent upon orderly marketing by Japan and “equitable supply ” to Australian merchants and manufacturers. ■ ’

The negotiations for the treaty lasted seven months, and the, result is a triumph for the Australian Minister in charge of trade treaties, (Sir Henry ‘-Gullet) and the Japanese Consul-general (Mr Murai). “The settlement achieves the Commonwealth Government’s intention at the outset of the dispute,” said Sir Henry Gullet. “The terms of the agreement are fully satisfactory to Japan, and industries in both countries will benefit. The dispute had its origin in the rapid development fh the export of Japanese cotton and artificial silk piece goods to Australia. If action had not been taken by the Commonwealth Government, Britain would have lost almost the whole of her export trade to Australia, but the .action was in defence of the overwhelming- majority., of Australian primary producers, who are dependent on the British capacity to continue to purchase Australian primary produce on an expanding scale.” Japanese purchases of wool from Australia during the season 1935-36 were 779,857 bales, valued at more than £ 14,000,000. Since May, Japan, as the result of the trade dispute, has bought no Australian . wool openly. Normal purchases during those six months would have been about 390,000 bales, valued at about £7,000,000. Making allowance for the appreciation in wool prices that should result from Japan's re-entry into the market, her purchase of the allotted quota of 267,000 bales, during the second half of 1936-37 season should be valued at more than £6,000,000. For the year 1937-38, her purchase of the full quota of 533,000 bales. will show a return , to Australia of considerably more than £12,000,000.