page_title: Basic Treaty of Friendship and Cooperation
section_title: Difficulty in negotiations
hierarchical_section_title: Basic Treaty of Friendship and Cooperation / Treaty Negotiations / Difficulty in negotiations
caption_attribution_description: Takeo Miki was inaugurated as Prime Minister on December 9, 1974.
context_page_description: The Basic Treaty of Friendship and Cooperation was a treaty signed between Australia and Japan that established a broad framework of principles to guide and enhance future bilateral relations in the political, economic, cultural and other fields. The treaty is historically significant because it is the first comprehensive treaty of its kind for both countries alike, containing both symbolic and practical provisions which acknowledged indispensable economic ties. The treaty was signed on 16 June 1976 by Prime Minister Malcom Fraser and Prime Minister Takeo Miki, and entered into force 21 August 1977.
  For Japan, the treaty was an essential step for their modern economic development as an emerging power amongst established industrial nations. On the Australian side, the vision was to refashion a politically ambivalent relationship and promote the natural commercial partnership between the countries.
  Both sides started from vastly different premises on the nature of the treaty to be negotiated. While Japan insisted on an encompassing Friendship, Commerce and Navigation type treaty, Australia preferred bilateral agreements on very specific matters of mutual interest.
context_section_description: The second negotiation round in Canberra proceeded from 28 January to 4 February 1975. It was in this round of meetings that the negotiation process hit a major snag due to highly divergent interpretations of the meaning of MFN treatment. The Japanese brought a retrospective interpretation to MFN treatment, which would have entitled Japanese firms to claim benefits afforded to foreign firms in the past by Australian policies that were no longer in operation. Under this interpretation it was expected that at least one Japanese automobile company could establish a wholly owned subsidiary in Australia under the same conditions General Motors was established in 1948, which was unacceptable to Australia. The Australian interpretation was that the MFN commitment would apply prospectively, meaning that Australia was only bound to entitle Japan nationals and companies with the same benefits being accorded at the time of application. The second round adjourned, with hopes being dashed that the treaty would be ready in time for signature when Prime Minister Takeo Miki visited near the end of February. 
  In a new set of proposals received in April 1975, the Japanese appeared to concede on the retrospectivity interpretation, putting forth a new phraseology for Articles VII and IX that would solve the contentious situation. Instead of the traditional MFN formula of "treatment no less favourable" it could be replaced by the concept of ‘fair and equitable treatment’ and ‘non-discrimination’ accorded by the contracting party to any third country. The ‘expressions’ of MFN treatment were further clarified in an informal meeting at the Gaimusho between Ashton Calvert, Secretary of the Australian embassy in Tokyo and Tadayuki Nonoyama, a member of the Japanese delegation. What was agreed in the meeting came to be accepted by both sides to be integrated into the final treaty.
caption: Prime Minister Takeo Miki in 1974
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