List of Illustrationsxiii Key Treaties and Events 1927 Japan-Australia Association formed by business firms and bankers. 1932 The Ottawa Agreement upheld the principle of preferential trade and confirmed Britain as Australia's most important customer and central to its trading interests. Countries such as Japan, while important to Australia, had to take second place behind the trading concerns of the United Kingdom. 1934 The 1934 Australian Eastern Mission-Australia's first diplomatic mission outside of Britain and its empire-sent Attorney-General John Latham to the countries of East and Southeast Asia. Popularly known as the 'Goodwill Mission', this included Latham's goodwill visit to Tokyo. 1936 22 May: the Australian government further entrenched the principle of preferential trade with the implementation of a new Australian trade policy-a 'trade diversion policy'. Tariff rates were to be raised substantially and a special licensing system introduced which would discriminate against imports from countries such as Japan and the United States while favouring British imports. Before May 1936, Japan and Australia had been negotiating a treaty of friendship, commerce and navigation. This was abandoned. The bitter trade dispute in 1936, together with the Australian iron ore embargo, left a disagreeable aftertaste in commercial relations, and trade between the two countries did not fully recover for many years. 1936-37 Australian exports to Japan more than halved and continued to fall. Japanese imports of Australian wool and wheat declined noticeably in the late 1930s.