How to Deal with Japan An avenue of hope is
opened up by Sir Harry McGowan's reference in his speech at Birmingham on Saturday to negotiations now proceeding between Imperial Chemical- Industries and their opposite numbers in Japan, not only with a view to sharing competitive foreign markets, but in regard to direct trade between Japan and Britain. He indicated the prospects of an agreement, one effect of which would be to control the volume and selling price of certain Japanese exports to this country. These are two obvious difficulties in regard to trade exchange with Japan. Her cheaply produced goods, if freely unloaded on our market, threaten home-made goods by undersell- ing. This difficulty is overcome if they are only put on the British market in limited quantities at the home producers' price. The other difficulty is that of getting our more expensively produced goods on to _her market at low Japanese prices. Sir Harry McGowan does not tell us how this is to be overcome. Under Mr. Harold Macmillan's comprehensive proposals the profits accruing from the difference of prices in the first transaction would be used to wipe out the losses in the second. But this presupposes a super-organization of industry, presumably beyond the 'scope even of- Imperial Chemical Industries. We shall hope to hear more about the negotiations 'when they are complete.
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