Jv. A U S T R A L IA .-J r

P R I M E  M I N I S T E R

FOR PRESS 23 APRIL 1978

ELECTORATE TALK

A new and significant stage has now been reached in the  development of the relationship between Australia and Japan  following our discussions in Tokyo this week.

Trade issues that involve only Australia and Japan issues  that are regularly discussed by Ministers and officials -  were put aside. Instead, Prime Minister Fukuda and I turned  exclusively to the much broader problems of world trade and

the world economy.

Although these topics may seem remote and not of direct  concern to Australians, the fact is what happens to world  trade is of vital importance to our country because, like  Japan, we are most dependent for our continued prosperity  on the sustained growth of world trade.

It is in Australia's interest as a major trading nation that  world trade become freer and expand, because it will have a  direct effect on what we sell, what we produce, and what  we export. This in turn will have a direct impact on our

living standards, and will help create new jobs for Australians

The aim of my discussions with Mr. Fukuda was to explore  informally our concern about the direction of international  trade and the world economy. I am now aware that there is a  significant degree of common accord between Australia and  Japan about the problems the world faces. There is also a  real understanding about the kind of solutions that we all  want .

Our talks in Tokyo this week took place at a critical time.  Heads of Government throughout the world are holding a series  of important meetings throughout the first half of this year.  These will have a lasting influence on how the world faces up

to the difficulties confronting trade, and the question of  raising the living standards of the developing poorer countries

There is an urgent need to find solutions to widen the basis  for an equitable expansion of world trade. It is also vital  that this is not confined to the major countries - developing  countries must also be involved if the world is to  realistically expect success.

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Australia and Japan are great trading nations. Japan is the  third largest in the world while our trade with one another  is the seventh largest. We therefore together have a major  contribution to the international discussions designed to make  sure that the right decisions are made at this critical time.

In the multilateral trade negotiations that have been taking place  between the major nations since 1973, discussions have centred  on industrial and manufactured goods.

Australia strongly believes that the scope of the MTN must be  widened. We believe agriculture must be included in the  negotiations if we are to achieve the objective so necessary  to regenerate world trade.

Offers have been made by the major industrial nations for a  40 percent drop in tariffs in manufactured goods, starting  in 1980. This formula sound impressive, but what does it mean?  Average industrial tariffs are about 10 percent. As cuts will  be fazed in over eight years - that is about half a percent

per year - this is hardly a major catalyst to encourage  world trade. For these reasons Japan understands why we will  continue to press forcefully for agriculture, to be included in  the MTN discussions.

An associated and central problem to all these issues is the  relationship between the developed and developing countries, and  the desire of the developing countries for a secure and stable  income for-:the commodities they produce. In Australia, we have

particular experience in testing the merit of stabilisation  schemes - our wool marketing arrangements are a fine example  of how the long term interest of both the consumer and producer  are protected.

On this question, an international proposal for a Common Fund to  finance a program of commodity price stabilisation has been  proposed, however progress has stalled on a number of issues,  including the question of direct contribution by governments.

We believe that governments should support such a Fund directly.  There is an obligation on governments for direct involvement  and concern. The Japanese Government appreciates Australia's  concern on this matter. Both countries have now agreed

that our senior officials will consult together to find ways of  bringing the various world views on this key question together.

During discussions with Mr. Fukuda - and throughout extensive  discussions between officials - we found a great measure of  agreement on objectives and ideals to try and find solutions  to the world's trade and economic problems.

Japan greatly appreciated that we came not to haggle or barter  over products, but to discuss global economic concerns. Japan  welcomed this opportunity to canvass areas of co-operation in  looking to global solutions.

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I believe our talks this week demonstrate our commitment to continue to act as a responsible member of the international  community.

Australia today has international obligations. These will be  met. It is no longer good enough for an Australian Government  to say that other nations are larger, more powerful and that these  questions are best left to them. We have a responsibility to

our own people to act in their interests in every way.

1978 could well be a watershed in events that will dictate the  world economic climate for the remainder of the century. Australia, as a major trading power, has so much at stake. We recognize the limits of our influence on world economic

affairs but it is our responsibility and obligation to act in  the interests of all Australians in international forums at  every possible opportunity. If we do not attempt to act with  our utmost vigour, history could well comdemn u s .

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