TNAG-2912-FCO40-4187-International-support-from-Asia-regarding-the-future-of-Hong-1993 — Page 103

Market Access Issues

CONFIDENTIAL

Although trade relations with Japan are generally excellent,

further structural reform of her economy is required to

integrate it more fully with the world economy. There also

remain a few market access problems which affect UK interests

significantly. These points are regularly raised with

Japanese ministers, but it would be extremely useful if they

were placed firmly on the agenda of the September visit. Prime Minister might say:

The

Look forward to hearing Japanese Government's view on the

state of Japan's economy. Welcome last April's Yen13.2

trillion economic package as stimulus to the Japanese economy.

Hope such financial measures can be combined with structural

reform to increase Japan's propensity to import. For

instance, we would like to see increased spending on

infrastructure as long as foreign firms can compete equally with Japanese contractors and more vigorous enforcement of

competition policy.

-

- Also hope we can discuss the few remaining market access

problems. Important that these are addressed because, at a

time of increasing trade imbalance between EC and Japan, such

problems provide ammunition for protectionists, in Europe and

elsewhere.

- Concerned that one of our main exports to Japan, Scotch

whisky, is still subject to discriminatory taxation six years

after a GATT Panel ruled that it should be treated similarly

to local shochu and other "like" spirits. Essential that

remaining discrimination be completely eliminated; it has an

adverse impact on UK interests and makes it harder for the UK

to explain in public the degree of market opening that has

occurred in Japan. You could take credit for this in the GATT

Round.

fed18/G7SUMMIT/pmmiyabilateral

CONFIDENTIAL