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Racial equality in the 21st century is not something that is struggled with in terms of dictating who can run a nation or who can have their name on a document regardless of their race, but in 1919 racial equality was a great concern to those affected and an afterthought to those who benefitted. During the signing of the Treaty of Versailles, United States President Woodrow Wilson outlined his "Fourteen Points", taking a step towards peace, yet racial discrimination wasn't included in the 'self-determination' of nations. Japanese officials made a proposal which was denied, due to the controversy that running a country while being another race other than European brought about. One of the contributing factors to the denial of the proposal was Australian Prime Minister Hughes (Billy Hughes), who believed that if the Racial Equality proposal was instated, then it wouldn't be beneficial to the white American population. This was because of Hughes' belief in the White Australian Policy which was an act of immigration restriction that denied non-European peoples access to reside in Australia, particularly people of Asian origin, that started in 1901 and definitively ended in 1973. This policy was put in place to encourage Australia to become a "white man's Australia", and rid the country of incoming Asian immigrants. Due to the Prime Minister disapproving of the proposal, Wilson also disapproved due to Hughes explaining the influx of immigrants it would cause to the United States. Additionally, had the proposal been approved in 1919, the American Black population would have benefitted from it, as it outlined that non-European peoples were permitted to be treated the same as white people, and granted the same rights that white people have, hence as Black people fell under racial segregation laws, they would have been granted access to a multitude of rights that they would have never been able to access previously, including the abolishment of white and Black segregation, Black citizens having the ability to vote, own land, be paid the same as a white person, be granted health care the same as a white person, use the same transport, as well as a myriad of other rights.

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Racial equality ensues when institutions give equal opportunities to anyone, regardless of race. Although Woodrow Wilson's speech outlines self-determination within nations, it missed a crucial factor that depicted whether a country could be self-governing or not, being the race of the individuals running the country. Due to the defeat of the Central Powers, supposedly, non-European countries no longer had to follow European law, yet within the Treaty of Versailles, there is no actual statement saying that non-European races can govern a non-European country. Japan wanted to rectify that through their Racial Equality Proposal, using Wilson's amendments as a backbone to their proposal. Japanese officials proposed, "The equality of nations being a basic principle of the League of Nations, the High Contracting Parties agree to accord as soon as possible to all alien nationals of states, members of the League, equal treatment in every respect making no distinction, either in law or in fact, on account of their race or nationality." The majority of the politically bigger countries agreed with the statement, yet Australia denied the proposal. Due to the "White Australia Policy" implanted in 1901, non-European people were denied immigration into the country, ensuring the country's population be mostly white. Wilson approved of the Australian policy as he believed America should be the same, and also denied the proposal.

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By definition, self-determination is where a country forms its own government, regulates its own statehood, and is not owned by another country. This term was introduced by the United States' 28th President, Woodrow Wilson, in 1918 during a speech he made towards the end of the First World War. In February of that year, Wilson declared, "National aspirations must be respected; people may now be dominated and governed only by their own consent. 'Self-determination' is not a mere phrase; it is an imperative principle of action." Wilson's speech outlined to politically smaller countries that they could choose their way of running their own country, rather than the Central Powers dictating to them how they should regulate their people. This opened up new potential for these countries as Wilson's speech presented a level-headed standpoint, expressing that the leaders of the country should be punished for their actions, rather than the people as they followed the rulers' laws and beliefs. Wilson emphasised these arguments of holding leaders accountable for the damage they have caused through his "Fourteen Points" as a foundation for peace after the war, influencing the signing of the Peace Treaty in 1919.