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done about contacts between future generations. Sir Edwin Nixon particularly underlined the importance of delivering a message about the UK welcome for Japanese investment. The Group should also put in a plea for the importance of the City of London which was the financial centre of Europe. Mr. Wolfers commented that Mr. Eddie George and British Invisibles would be in Japan just before the 2000 Group, which would underline that message. The Prime Minister thought that this coincidence of dates was useful. Sir James Eberle referred to the recent report on Japan/EC relations by the Japanese Foreign Ministry and to the new Chatham House report on the same subject. These raised questions as to whether we were best placed to tackle the relationship bilaterally or as part of the EC. Mr. Needham said that there was some danger of the Japanese down-grading their relationship with the UK. We needed to remind them firmly that Japan had not many friends and that the UK was a particular friend. We should stress that they should not redirect their investment decisions for political reasons, e.g. to France or to Germany, or to divert too much attention to the Asia-Pacific.
The Prime Minister felt that at the present time the Japanese would be looking over their shoulders towards US reactions. The new US Administration would certainly be upset about the size of the Japanese surplus. It would be natural for Japan therefore to try to counteract this and to accelerate its trade and investment towards the US; particularly so if they saw the US as free- traders and, with some inter-European squabbles continuing, the threat of Fortress Europe re-emerging. Mr. Howell agreed that the new US Administration would dominate Japanese thoughts. We could certainly continue to portray ourselves as their best friend. But this argument rang hollow over reform of the UN structure. The Japanese position was ambiguous. They wanted the recognition implied by Permanent Security Council membership; but they were not necessarily ready to take on all the responsibilities. What advice had the Prime Minister for the Group?
The Prime Minister recommended playing the issue away as much as possible. The real question was, why were the Japanese pressing? Fundamentally it was because they had no key role in any major forum; hence their interest in the G7. They were now pressing on the Security Council. But
membership was uncomfortable; it involved sending troops to the hot spots of ? Chine
Russia
the world. Others were knocking at the door; Germany and India, and there was some talk of an EC seat. His advice was to play it away. The Foreign Secretary suggested deflecting the question by enquiring from their Japanese