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ARE TO BE DECIDED AFTER THE SUMMIT. THE ANA DECISION IS STILL TOO
CLOSE TO CALL. THE JDAS HSX ORDER IS ALSO NOT SETTLED BY THE BAE 125 IS STRONGLY FAVOURED BY THE ASDF. LAST MINUTE INTERVENTION BY THE US CANNOT BE RULED OUT. THE MARINE GAS TURBINE BUSINESS IS LIKELY TO BE SPLIT BETWEEN RR AND GE. (OUR JDA FRIENDS TELL US THAT OUR VIEWS ARE
WELL REGISTERED AND THAT THERE IS NO NEED TO RAISE THE TEMPERATURE
AS FAR AS THESE SPECIFIC CONTRACTS ARE CONCERNED. MR MAJOR NEED NOT GO INTO DETAIL, ALTHOUGH IT WOULD BE HELPFUL OT BE ABLE TO TELL BAE AND RR THAT THEIR NAMES WERE MENTIONED). IF TIME ALLOWS, REFERENCE TO THE NHK ORDER FOR A BROADCAST SATELLITE SHOULD BE MADE. (DTI HAVE DETAILS). A FIRST ORDER IS NOT ONLY VALUABLE IN ITSELF BUT ALSO A PRECEDENT FOR EUROPEAN SUPPLIERS.
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4. ON BILATERAL AIR SERVICES TOO, WE HAVE AN OPPORTUNING TO EXPRESS OUR CONTINUING CONCERN TO THE JAPANESE AND OUR HOPE FOR FURTHER PROGRESS AT THE NEXT ROUND OF TALKS ON 6-8 AUGUST.
5. EC-JAPAN. THESE BILATERAL ISSUES ARE DIRECTLY RELEVANT TO JAPAN/EUROPE RELATIONS MORE GENERALLY, AND TO THE CONTINUING DANGER OF EUROPEAN INTERESTS SUFFERING FROM US/JAPAN BILATERALIS. AND JAPAN HAVE IN RECENT MONTHS REACHED A RAFT OF BILATERAL AGREEMENTS ON SEMICONDUCTORS, CONSTRUCTION, STRUCTURAL IMPEDIMENTS ETC. THERE IS A STRONG DISPOSITION AMONG SENIOR POLITICIANS HERE TO BUY OFF THE AMERICANS FOR SIDER POLITICAL REASONS. MF KAIFU WILL JUST HAVE HAD A BILATERAL MEETING WITH PRESIDENT BUSH IN KENNEBUNK PORT. IT IS CERTAINLY NOT IN OUR INTEREST TO UNDERMINE IN ANY WAY THE US/JAPAN LINK, BUT IT IS LEGITIMATE AND NECESSARY FOR US TO REMIND THE JAPANESE OF OUR OWN AND THE EURPOEAN INTEREST. ONE WAY TO DO THIS IS TO REMIND MR KAIRU OF THE POSITIVE ROLE WE HAVE PLAYED AND WILL CONTINUE TO PLAY ON SUCH ISSUES AS THE EC/JAPAN DECLARATION AND THE POST-QOOW REGIME FOR CARS, BUT TO WARN OF INCREA- SING CONCERN WITHIN EUROPE AT THE WIDENING TRADE DEFICIT WITH JAPAH WHICH IS LIKELY TO OVERTAKE THAT OF THE US WITH JAPAN THIS YEAR. JAPAN'S FRIENDS NEED TO HAVE POSITIVE EXAMPLES OF PROGRESS WITH MARKET-OPENING AND RESPECT FOR EUROPEAN CONCERNS IF PROTECTIONIST PRESSURE IS TO BE RESISITED.
6.
HONG KONG/CHINA. THIS IS A POSITIVE STORY SO FAR. JAPAN HAS ITS OWN IMPORTANT INTERESTS AS STAKE AND THERE IS SCOPE FOR VERY CLOSE BILATERAL COOPERATION. THE FORTHCOMING VISITS OF BOTH PROME MINISTERS TO PEKING PROVIDE THE BEST POSSIBLE COOCASION FOR A FULL DISCUSSION OF THE SITUATION. ONE PROPOSAL MIGHT BE FOR ANOTHER JAPANESE MINISTER TO VISIT HONG KONG BEFORE TOO LONG. JAPAN MIGHT ALSO BE ABLE TO HELP MORE OVER VIETNAMESE BOAT PEOPLE.
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