TNAG-2346-FCO40-3415-Political-relations-between-Hong-Kong--Japan-and-China-1991 — Page 33

But our way

sometimes linked with the protectionist and interventionist approach

in Industry. A French text on industry was now being dealt with.

This was designed to preserve EC industry from outside competition.

The UK was resisting this. We did not see the need for a clause on

industry in the Treaty. If such a clause were included then it

should underline the commitment to free market principles. The UK

wished to put emphasis on cooperation rather than concentrate on one structure with the Commission as executive. We were not doing this

just to please Japan but to pursue our own interests. would move Europe in a direction which would favour Japan. We hoped

that this would be reflected in Japanese business decisions. The UK

wanted to be at the heart of Europe; we did not want to be isolated and we wished to press for an open market for trade and investment. Mr Hiraiwa asked whether this would be reflected at the negotiations

in Maastricht. The Secretary of State replied that it had already

been reflected at Noordwijk. He had made the point about the

industry clause the previous week.

4.

The Secretary of State said he would welcome the Keidanren's analysis of the Soviet Union. The old system had been smashed, a new system had not yet been created. There was need for more discussion about a centre in Moscow and its relations with the Republics. Mr Yeltsin and the Ukrainians had argued for a minimum centre and more power for the Republics. But smaller Republics such as Kazakhstan, as well as the city of St Petersburg did not want all power to go to the Republics. A centre was needed to avoid chaos. The reappointment of Shevardnadze was an attempt by Gorbachev to underline the continuing importance of a centre. This would come to a head after the referendum in the Ukraine on 1 December. Our view

was that we should not rush to recognise the Ukraine until they were willing to accept agreements on nuclear arms. We did not want huge stockpiles of nuclear arms in the Republics. There was also the

need for debt settlements. The Republics had to accept some

responsibility for debts. What was the experience of Japanese

business in the Soviet Union?

5. Mr Hiraiwa said that the Japanese approach was on the basis of recognising that no new system had been established in the Soviet Union. But Japan wanted to help in the transition to a market