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TO PRIORITY TOKYO TEL NO 254 OF 14 MAY INFO HONG KONG (PERSONAL FOR GOVERNOR)
CALL BY JAPANESE AMBASSADOR.
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1. KATO CALLED ON CORTAZZI ON 13 MAY. HE EXPLAINED THAT MOTONO (DIRECTOR-GENERAL, ECONOMIC AFFAIRS BUREAU, MFA) HAD TELEPHONED HIM FROM PARIS TO ASK WHAT THE LIKELY IMPACT OF THE SUMMIT MIGHT BE CN UK/JAPAN AND EEC/JAPAN TRADE RELATIONS. KATO SAID THAT SOME OF MOTONO'S COLLEAGUES IN THE OTHER MINISTRIES MIGHT HAVE ASSUMED, BECAUSE THE JAPANESE HAD COME IN FOR LITTLE CRITICISM AT THE SUMMIT ON THE TRADE FRONT, THAT THE PRESSURE HAD NOW BEEN RELAXED.
2. CORTAZZI SAID THAT OUR CONCERN ABOUT THE TRADE IMBALANCE CONTINUED AND THAT THE PRIME MINISTER AND DR OWEN HAD REFLECTED
THIS DURING THEIR BILATERAL TALKS WITH MR FUKUDA ON 8 MAY. (SUMMARY IN IMMEDIATELY FOLLOWING PERSONAL TELEGRAM) THE LINE TAKEN BY MR DELL IN TOKYO HAD THE FULL BACKING OF THE PRIME MINISTER. ALTHOUGH WE RECOGNISED THAT THE JAPANESE NEEDED TIME TO FIND A SOLUTION, THE MUTED LANGUAGE OF THE SUMMIT SHOULD NOT BE INTERPRETED AS A WEAKENING OF THE UK POSITION ON TRADE WITH JAPAN. CORTAZZI ADDED THAT OUR VIEWS WERE SHARED, WITH CERTAIN NUANCES, BY OUR EUROPEAN PARTNERS AND BY THE US ADMINISTRATION. AFTER KATO HAD REMARKED THAT THE UK AND FRANCE HAD BEEN LESS ENTHUSIASTIC IN DENOUNCING PROTECTIONISH THAN THE US, FRG OR JAPAN, CORTAZZI EXPLAINED THAT THE GOVERNMENT DID NOT WISH TO TAKE THE PROTECTIONIST ROAD BUT THAT THE PRESSURE ON MINISTERS FOR RESTRICTIVE MEASURES
REMAINED. MR DELL'S REMARKS IN TOKYO POINTED TO THE FACT OF PROTECTIONIST PRESSURE IN THE UK AND TO THE DANGER THAT THIS PRESSURE WOULD ESCALATE IF A SOLUTION IN TERMS OF AN INCREASE IN OUR
EXPORTS TO JAPAN WAS NOT FOUND.
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