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CONFIDENTIAL
TO PRIORITY TOKYO TELEGRAM NUMBER 255 OF 14 MAY INFO HONG KONG (PERSONAL FOR GOVERNOR).
FOLLOWING PERSONAL FOR AMBASSADOR FROM FE D.
MIP T: CALL BY JAPANESE PRIME MINISTER.
FOLLOWING ARE MAIN POINTS OF RECORD:
BEGINS
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1. AFTER PRELIMINARY COURTESIES MR FUKUDA SPOKE OF THE CLOSE
RELATIONS BETWEEN THE UK AND JAPAN BEFORE THE WAR AND EXPRESSED
THE WISH TO RESTORE RELATIONS TO THAT LEVEL AGAIN. HE PERSONALLY
BELIEVED THAT RELATIONS WERE NOW IMPROVING, THE PRIME MINISTER
AGREED, BUT SAID THAT THERE WAS ONE PROBLEM WHICH MR. DELL HAD RAISED WITH HIM DURING HIS VISIT TO JAPAN, NAMELY OUR WORRY ABOUT
THE IMBALANCE OF TRADE AND ITS EFFECT ON UNEMPLOYMENT. JAP AN WAS
SO PRODUCTIVE THAT THERE WERE BOUND TO BE DIFFICULTIES. IF HE
RAISED THESE PROBLEMS WITH MR. FUKUDA, HE WANTED TO ASSURE HIM THAT HE WAS NOT DOING SO IN ANY SPIRIT OF ILL-WILL. MR FUKUDA
SAID THAT IF THE PRIME MINISTER FOUND ANY PROBLEMS, HE HOPED HE
WOULD LET HIM KNOW. THE PRIME MINISTER SAID THAT HE WOULD
CERTAINLY TAKE UP THIS OFFER.
2. DR OWEN SAID THAT THE MAIN PROBLEM IN THE E E C'S RELATIONS WITH JAPAN WAS STILL SHIPBUILDING, AND TO A LESSER EXTENT STEEL. THERE WAS ALSO A PROBLEM OVER THE PENETRATION OF THE ELECTRONICS INDUSTRY AND TELEVISION SETS. MR. FUKUDA HIMSELF WOULD KNOW THAT THIS WAS NOT SOLELY, OR EVEN PRIMARILY, A BRITISH PROBLEM. WE HAD RAISED IT WITH THE JAPANESE AS THE PRESIDENCY OF THE EUROPEAN COUNCIL. NEVERTHELESS, WE FACED A PARTICULAR DIFFICULTY, AS A MARITIME NATION, WITH OUR SHIPBUILDING INDUSTRY IN DEPRESSED AREAS SUCH AS MERSEYSIDE, AND WE FACED A REAL RISK OF HAVING NO SHIP- BUILDING INDUSTRY LEFT. THIS WAS A MATTER OF CONCERN BOTH TO US
AND TO THE FRENCH, AND INDEED TO THE SMALLER E E C COUNTRIES, IN BRITAIN, WHOLE FIRMS HAD COLLAPSED, AND IT WAS VERY DIFFICULT TO FIND OTHER WAYS OF INTRODUCING EMPLOYMENT, E G INTO CLYDESI DE,
NR. FUKUDA SAID THAT SHIPBUILDING PRESENTED A PROBLEM WHICH MIGHT
NOT YET HAVE BEEN FULLY SOLVED. BUT IN THE CASE OF OTHER PRODUCTS,
/SOLUTIONS
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