CONFIDENTIAL
062247 MDHOAN 10
Japanese know in time before the meeting with Jiang.
APEC
5. Fukuda said that Seattle could be a historic occasion, but it was too early to tell. The Leaders' meeting itself would be Largely unscripted. It should at least help to raise the profile of the region with the US public and Congress. Because of the great differences among the Asia/Pacific countries, any development of the forum was bound to be gradual and loose. One new feature of the meeting would be the presence of the President of China together with representatives of Taiwan and Hong Kong, particularly the former. There were signs that the PRC now regretted this. There was a private row over their insistence that Qian Qichen should also be present, and they were refusing to Let Taiwan into the EAEC. Asked if the US had proposed an APEC preferential trade arrangement, Fukuda said that they had not. Such an arrangement would not work anyway.
GATT/NAFTA
6.
Coles noted that the Seattle meeting would come the
day after the NAFTA vote. Fukuda said that the Japanese had not originally been keen on NAFTA but had recently changed their view because it now seemed crucial for world trade. Crowe and Jay described our view of the current state of play on the Uruguay Round.
US/JAPAN
7.
Fukuda said that there was little or no debate in Japan about the value of the US/Japan security treaty which was now well accepted. The Russian danger might be reduced, but the North Korean and other threats were seen as serious. The Treaty enabled Japan to assure its security without a large military build-up, which would alarm its neighbours. On the American side too, there did not seem to be much criticism of it, partly because of the generosity of Japanese Host Nation Support (probably about $100,000 per soldier).
8. Japanese and American cooperation was close on political and global issues. The only problem was the trade surplus. The US had given the Hosokawa government a grace period, but serious negotiations would now get under way and continue until early
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