CONFIDENTIAL
Express gratitude for the Japanese Government's continuing encouragement of Japanese investment in Hong Kong and the hope that Japan will do all it can to maintain the confidence of Hong Kong people in
the future.
GATT Uruguay Round
The GATT Uruguay Round will be a key issue at Houston. EC/US differences over the nature of the
commitments to be made on agriculture will need to be resolved. Japan's main concern is to continue her very high support and protection for rice, aimed at maintaining self sufficiency. This issue has a very high political profile in Japan. She is therefore happy for the limelight at Houston to be taken by the EC/US dispute. Nevertheless, for the draft communiqué she has proposed a reference to "taking account of food security" which the US have not yet agreed. We can accept the Japanese wording on the basis that it does not excuse Japan from the reductions in her support and protection for rice, which will be necessary if we are to get a good
outcome on agriculture in the Round.
We hope that Heads of Government at Houston will agree on the need for stronger rules for dispute settlement. In return we want the US to abandon use of
unilateral measures and we expect a commitment to this effect to be included in the communiqué: Japan, as a main target of US measures, stands to gain from such an outcome, but has yet to give public support to the need
CONFIDENTIAL
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