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CONFIDENTIAL

5.

Thus the Pol Pot forces may stage a revival during the monsoon,

benefitting from Chinese supplies which are now reaching them

through Thailand and with the complicity of some elements there.

A separate question is whether the continued fighting will affect

the planting and harvesting of the next rice crop; this and

the population upheavals could lead to famine.

Refugees

12. On 3 April 1979, the Japanese Cabinet decided to admit a

quota of 500 Indo-Chinese displaced persons. Hitherto,

Japan had admitted only very few refugees for permanent

resettlement.

Japan's assistance towards alleviating the

refugee problem in the region has been mainly by way of generous

financial contributions to the United Nations High Commissioner

for Refugees (UNHCR).

While finance for the UNHCR is essential,

the greater need is for permanent resettlement places for refugees

13. The United Kingdom has so far accepted 1,830 Indo-China

refugees and is committed to receive some 1,050 more by March 1980. This is in addition to our commitment to receive here refugees

rescued by UK-registered shipping when such refugees cannot be

resettled elsewhere and to consider accepting any refugees with

close connexions with the United Kingdom.

EEC/JAPAN

14.

The problem of the Japanese trade and payments surplus has

been under review within the Community for some

some years and has

been discussed by the EEC Heads of Government on several

occasions.

The Commission has been mandated to put pressure

on the Japanese to take steps to reduce both the global surpluses

and the imbalance with the EEC. So far these representations

which to some extent have been concerted with those of the US have

met with only limited success.

The topic will be on the agenda

of the European Council a week before the Tokyo Summit.

CONFIDENTIAL

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