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FM COMMS-67 SUMMIT, TOKYO, JAPAN.
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Mr. Miyazawa said that he was pleased to be able to tell the Prime Minister that the Japanese government had decided earlier that morning to make a major concession on whisky tariffs in the context of the GATT market access package. These would be reduced to zero. The Prime Minister said that this was very good news. The bigger the market access package,
the better. satisfactory outcome to the Quad talks would help to get the Summit off to a flying start.
Russia
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The Prime Minister said that as far as the meeting with President Yeltsin was concerned, it would be more productive to try to engage him in a political dialogue rather than to lecture him on how to run his economy. The Russians had been quite helpful, for example, on Bosnia and Iraq. Mr. Miyazawa noted that the IMF had agreed to provide a standby credit. How much progress had Russia made towards a market economy? The Prime Minister said that his Diplomatic Adviser, Sir Rodric Braithwaite, had found on а recent visit to Russia that surprisingly good progress had been made at the micro-economic level compared with the situation 18 months ago. The concept of privatisation was not yet fully understood but a free market system was beginning to take root.
Mr. Miyazawa asked whether giving economic
whether giving economic assistance to Russia was really worthwhile. The Prime Minister said that it was, partly for political and partly for economic reasons. The political reasons were as important as the economic ones. There was admittedly an element of double standards, which would not be applied in the case of a small developing country. But it was in all our interests to keep Russia on a reformist track. The other advantage of trying to engage the Russians politically was that they would then be less likely to make financial demands. If Yeltsin were able to take part in a political dialogue with the G7, he would feel under less pressure to go home with large sums of money.
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The Prime Minister asked whether Yeltsin had indicated what he wanted to discuss at the Summit. Mr. Miyazawa said that Japan did not intend to raise bilateral matters at the Summit. He would have a separate meeting with Yeltsin at which he would stress Japan's wish to settle the territorial issue on the basis of "law and justice". He did not expect Yeltsin to give a detailed affirmative answer but hope that he would agree to this way of handling
He had already given Yeltsin things. assurance that he would not attempt to negotiate on this occasion. II Yeltsin was prepared to say that the issue should be taken up during his next visit, possibly in the autumn, that would be a very satisfactory outcome. The Prime Minister said that he himself had raised the Northern Territories issue with Yeltsin. We would like to see the issue settled. Mr. Miyazawa said he was grateful.
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