While Japan insisted on an encompassing Friendship, Commerce and Navigation (FCN) type treaty, Australia preferred bilateral agreements on very specific matters of mutual interest.

[7] The primary area of contention during treaty negotiations lay in the retrospective and prospective interpretations of the Most Favoured Nation (MFN) clause that was resolved by formulating a new approach to phrasing.

The prolonged period of negotiations constituted an intensive learning process for both sides to resolve a unique set of problems that ultimately produced an equitable and mutually advantageous agreement.

[8] After the Meiji Restoration, Japan's industrial development was hindered by the Unequal Treaties imposed by the Imperial Powers in the 19th and early 20th centuries[9] which restricted their access to world markets.

[8] Japan's historical sensitivity about being treated equally[10] underscored their strong devotion to negotiating a FCN type treaty with Australia that would give them "formal assurances of its rights as an economic partner".

[12] Although the White Australia policies have become obsolete, the deep historical linkages which favoured Britain remained embedded in Australian institutions until the time of the NARA treaty (Drysdale, 2006, p492).

The economic pragmatism that characterised the international sphere after World War II facilitated the beginning of a burgeoning resource trade relationship between Australia and Japan which was formalised by the 1975 Agreement on Commerce.

[19] Although the departments were receptive to the politically symbolic aspects of a FCN treaty, the report presented to the IDCJ in early 1972 indicated a consensus that the practical problems outweighed the advantages.

Sir John Crawford gave resounding evidence for the inadequacies in Australia's ad hoc approach and suggested an ‘umbrella treaty’[23] that provided a framework of principles to base negotiation of specific agreements.

[13] The Committee approved of Sir John Crawford's conclusions as in January 1973 in its overall report, it stated "that a treaty framework could be devised which would confer equal and mutual benefits to both parties".

[27] In light of the committee's responses, a small team of officers from the Department of Foreign Affairs (DFA) were assembled to produce a draft treaty and accompanying report which was completed mid-July.

[30] In the joint communique issued at the end of the ministerial committee meetings, Whitlam and the Japanese Prime Minister, Masayoshi Ohira agreed that the two Governments would begin discussions on a broad bilateral treaty.

[29] In January, 1974, a small delegation team headed by Michael Cook, First Assistant Secretary, North and South Asia Division, DFA, was set up to handle the negotiations with Japan.

[41] 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.

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.

[43] The ‘expressions’ of MFN treatment[44] 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.

[4] A congratulatory call by Japanese Prime Minister Miki, prompted Fraser to instruct the departments "to get over their bureaucratic quibbling and ‘legalistic nit-picking’"[32] in order to maintain the momentum of negotiations.

[63] Another perspective by political scientist, Takashi Terada, mentions how the treaty was significant because it officially dispelled Australia's negative perceptions of Japan during the Pacific War.