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Structural reform, including
US/Japan relations
Bilateral Issues
DTI, OT2
FED; ERD
Tokyo Stock Exchange
HM
DTI, FS; FED
Treasury
Trade, including Opportunity Japan and inward investment
DTI, OT2
DTI, EEP;
ECD (E); FED
-
Air Services
MAED
Dept of
Transport
Cultural Festivals }
—
} (Defensive) Working } Holiday Visa Scheme } }
FED
Info Dept
(Defensive) Osaka
}
Garden Festival
}
4.
Briefing will be in the form of a Private Secretary letter. As usual, contributions on individual topics should be concise providing a line to take combined with essential background in a form which can be directly incorporated into the letter. Departments should aim for no more than three pararaphs per topic, and less if possible.
5. I should be grateful for draft contributions to me by cop on Friday 29 December. I appreciate that this is a tight deadline in view of the intervening Christmas holiday, but we need two days to put the brief together, which must leave FED on 4 January.
P Leslie-Jones (Miss) Far Eastern Department K211
270 2956
19 December 1989
CC:
Mr Edmonds, International Finance Division, HMT Ms Blaber, Dept of Transport
DTI, FS
DTI, DTP
CONFIDENTIAL
Сс
A LOLIC DTI
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Pm/kaju talles.
CONFIDENTIAL
M. Johnson
M-AUEN
132575
MDHIAN 9755
Mr Shapes Fim (2). HMF
Av-Calmonds. Intunerica
Divisie7
Hu
FM TOKYO
TO DESKBY 191OOOZ FCO
TELNO 1172
OF 190845Z DECEMBER 89
FOR FED
inreD انعامات ttc ناسان
/
FCC Francis Baber, AU Dwim Bages
YOUR TELNO 996: VISIT OF JAPANESE PRIME MINISTER
1.
YOUR PROPOSED MENU SEEMS TO COVER THE GROUND ADMIRABLY. AS YOU IMPLY, THERE IS UNLIKELY TO BE SUFFICIENT TIME TO DEAL IN DETAIL WITH ALL TOPICS. I ASSUME THAT EAST/WEST ISSUES WILL BE A MAJOR SUBJECT. KAIFU WILL HAVE JUST VISITED BERLIN, AND MADE A MAJOR SPEECH THERE AND HE WILL PRESUMABLY HAVE FURTHER JAPANESE ASSISTANCE TO OFFER TO POLAND AND HUNGARY WHEN HE GOES ON THERE. ANOTHER MAJOR SUBJECT WILL BE CHINA/HONG KONG/VIETNAMESE BOAT PEOPLE. THE JAPANESE CONTINUE TO BE HELPFUL ON HONG KONG AND ARE QUIETLY SUPPORTIVE OF OUR POSITION ON VIETNAMESE BOAT PEOPLE: THEY MIGHT BE CAREFULLY URGED TO COME OUT MORE OPENLY (ALTHOUGH THEY ARE OBVIOUSLY SENSITIVE TO US VIEWS). KAIFU, ON THE OTHER HAND, MAY WANT TO PRESS THE PRIME MINISTER THAT THE TIME IS NOW RIGHT FOR THE WEST TO SOFTEN ITS POSITION ON CHINA (MY TELNO 1155).
3.
ECONOMIC ISSUES. THE MAIN ISSUE CONFRONTING THE JAPANESE IS THEIR RELATIONSHIP WITH AND THREAT OF PROTECTIONISM FROM THE UNITED STATES (MY TELNOS 1123 AND 1156). THIS IS LINKED IN SOME WAYS TO THAT OF THE URUGUAY GMUND AND STRUCTURAL REFORM (MY TELNO 1132). IT WOULD BE HELPFUL IF THE PRIME MINISTER COULD EXPRESS OUR CONCERN THAT, FOR THE SAKE OF THE OPEN TRADING SYSTEM AND WESTERN SECURITY, THIS IMPORTANT RELATIONSHIP CONTINUES TO BE MANAGED SUCCESSFULLY. THE JAPANESE MAY RESPOND THAT A PRIOR CONDITION IS ACTION BY THE AMERICANS TO REDUCE THEIR BUDGET DEFICIT AND DEAL WITH ISSUES OF INDUSTRIAL COMPETITIVENESS. WHILE THIS IS AN IMPORTANT PART OF THE SOLUTION AND ACTION BY BOTH PARTIES IS ESSENTIAL, WE SHOULD TAKE ADVANTAGE OF KAIFU'S PRESENCE TO PRESS THE JAPANESE ON THE NEED TO GO MUCH FURTHER AND FASTER ON STRUCTURAL REFORM ON THE LINES OF THE PRIME MINISTER'S SPEECH HERE IN SEPTEMBER: TO INCREASE FURTHER THE CONSUMPTION OF IMPORTED GOODS AND INCREASE COMPETITION AND TRANSPARENCY IN BUSINESS DEALINGS. IN THE GATT ROUND,
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Mr
Haw.rell
To see
зага
RM 20/12
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13257
MDHIAN 975%
AGRICULTURE STANDS OUT AS THE AREA WHERE JAPAN NEEDS TO CONTRIBUTE SOMETHING TO ACHIEVE A SUCCESSFUL OUTCOME, AND WHERE MARKET PRINCIPLES NEED TO BE MORE RIGOROUSLY APPLIED. WE DO NOT THINK THERE IS MUCH ON THE EC/JAPAN AGENDA TO RAISE AT PRIME MINISTERIAL LEVEL, THOUGH ON AUTOMOBILES KAIFU MAY WELL ENLIST OUR SUPPORT IN OPPOSING ANY PROPOSAL TO COUNT JAPANESE PRODUCTION IN EUROPE AGAINST DIRECT JAPANESE EXPORTS IN THE TRANSITIONAL PERIOD.
4. IT WOULD CERTAINLY BE HELPFUL TO ADDRESS BILATERAL
ISSUES ALBEIT BRIEFLY. GIVEM THE SHORT TIME I SUGGEST THAT THE PRIME MINISTER SHOULD FOCUS ON FIVE POINTS:
(A) TSE. THE PRIME MINISTER WILL BE ABLE TO NOTE WITH APPROVAL THE DECISION OF THE TOKYO STOCK EXCHANGE TO ADMIT 10 NEW MEMBERS BY AUTUMN NEXT YEAR, WE SHOULD KNOW BY THE TIME OF THE MEETING THAT THE TWO OUTSTANDING BRITISH APPLICANTS HAVE BEEN INVITED TO APPLY. KAIFU MAY RESPOND WITH REFERANCE TO THE ASPIRATIONS OF JAPANESE REGIONAL BANKS IN LONDON. I SUGGEST THAT OUR RESPONSE TO THIS SHOULD BE WELCOMING IN GENERAL BUT CAUTIOUS ON SPECIFICS.
(B) OPPORTUNITY JAPAN. WE ARE JUST ABOUT ON
COURSE FOR OUR 1990 TARGET OF #3 BILLION IN EXPORTS (AFTER AN INCREASE OF 30% THIS YEAR) BUT WE ARE LOOKING FOR CONTINUED SUPPORT FROM THE JAPANESE GOVERNMENT FOR OUR EFFORTS. OUR EXPORT DRIVE WILL NATURALLY CONTINUE BEYOND THE INITIAL 3 YEARS OF THE CAMPAKGN: WE NEED SOME BIG-TICKET SALES.
(C) INWARD INVESTMENT. THE PRIME MINISTER MAY WISH TO NOTE THAT INVESTMENT CONTINUES TO BE A VERY SUCCESSFUL PART OF OUR BILATERAL RELATIONSHIP. BUT IT HAS ALSO PROMPTED SOME COMPANIES TO THINK THEY SHOULD INVEST IN OTHER EUROPEAN COUNTRIES ON POLITICAL GROUNDS, EVEN THOUGH COMMERCIAL FACTORS MAY STILL FAVOUR THE UK. WE HOPE THE GOVERNMENT WILL ENCOURAGE JAPANESE COMPANIES TO TAKE THEIR DECISIONS ON PURELY COMMERCIAL GROUNDS, AND BEAR IN MIND THAT THE UK HAS BEEN MOST CONSISTENT IN ITS WELCOME FOR JAPANESE COMPANIES, AND HAS A VERY GOOD LABOUR SUPPLY AND INFRASTRUCTURE TO OFFER.
(D) UK 90. THE PRIME MINISTER MIGHT REFER BRIEFLY TO HER AND KAIFU'S CO-PATRONAGE OF NATIONAL CULTURAL FESTIVALS.
(E) AIR SERVICES. WE SHOULD REGISTER OUR SERIOUS DISAPPOINTMENT AT JAPANESE FAILURE EVEN TO RESUME TALKS WITH US ON INCREASING TRUNK ROUTE CAPACITY AND LIBERALISING
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