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Press Conference by the Japanese Delegation to the 1997 APEC Meetings in Vancouver

On the Background of the Leaders Meeting

1. Introduction of speaker and briefing status
2. Opening statement by the Spokesperson
3. Japanese environmental policy
4. Early voluntary sectoral liberalization (EVSL)
5. Currency crisis in Asia
6. Assistance for Asian economies
7. Japan's initiatives on greenhouse gas emissions
8. Japan's other environmental measures
9. The prominence of the currency issue in APEC discussions
10. Leaders' political message on financial issues
11. Japan-People's Republic of China bilateral contacts
12. Japan's participation in the EVSL process
13. Japan's stance on currency speculation
14. Strength of Leaders' political message on financial issues
15. Japan's model for dealing with financial institutions in crisis

1. Introduction of speaker and briefing status

   Official of the International Press Division: Good afternoon, ladies and gentlemen. We are now going to start the briefing on the Background of the Leaders Meeting. The briefer is Mr. Hiroshi Hashimoto, Spokesperson for the Prime Minister of Japan and the Japanese Delegation.

2. Opening statement by the Spokesperson

   Spokesperson for the Prime Minister of Japan Hiroshi Hashimoto: The Canadian Chair has already briefed you on the morning sessions of the Leaders' Meeting. Unfortunately, I have not been debriefed by my colleagues on the content of the Leaders Meeting. Therefore, unfortunately, I cannot share with you the joy of the actual content of the discussions that were held this morning. However, I would like to explain to you the basic stance of the Government of Japan with the Prime Minister's presence in the Leaders Meeting. I understand that this morning, the Leaders exchanged views on the currency issue in Asia and on infrastructure, and I think that the environmental issue has been taken up during the business luncheon. Membership issues, etc., will be discussed in the afternoon. But, I do not know whether they actually discussed matters in this order.

   I would like to quickly talk to you once again on the currency issue in Asia, infrastructure, the Kyoto Conference and membership.

   First, on the currency instability in Asia, it is necessary for the APEC Leaders to convey jointly a strong message of cooperation on tackling currency instability in Asia, so that the currency turmoil and stock fluctuations would not spread instability to the entire world economy. In this connection, it is most desirable for the APEC Leaders to endorse the newly agreed Manila Arrangement. It is also important on the part of the Asian economies to implement structural change and to realize sustainable economic development. Cooperation among the APEC members is, therefore, important in promoting human resources development, developing small- and medium-size enterprises, etc. Prime Minister Hashimoto met Prime Minister Chretien, President Clinton and President Kim Young Sam in separate meetings yesterday. In those meetings, he stressed the need to issue a strong message on the Asian currency issue. I am sure that Prime Minister Hashimoto will contribute constructively to discussions on the subject in the Leaders Meeting.

   As for the subject of the economy, the Government of Japan is taking all possible measures to ensure the financial stability of the financial system of Japan. Prime Minister Hashimoto is expected to inform his fellow Leaders about his determination to recover the confidence of the domestic and overseas people concerned in the Japanese financial system as a whole.

   On the topic of infrastructure, it is timely that the Canadian Chair has decided to include infrastructure in the agenda for discussion by the APEC Leaders. Prime Minister Hashimoto is expected to express his thoughts on this subject, particularly on information infrastructure and electronic commerce.

   On the Kyoto Conference on Climate Change, the Government of Japan considers the Kyoto Conference to be extremely important. Regarding this issue, Prime Minister Hashimoto is expected to make a strong case for this subject. Japan's proposal on targets for greenhouse gas emissions is to set the standard reduction rate at 5% with the introduction of the principle of applying differentiated treatment on the actual reduction level in accordance with the economic and environmental realities in each country. Japan's proposal is well-balanced and substantive. Japan has been asking the developing countries for further efforts in order to contribute to building a consensus at the Kyoto Conference by increasing their engagement in this vitally important global issue. Prime Minister Hashimoto is also expected to announce new initiatives by Japan to assist the efforts of developing countries to mitigate greenhouse gas emissions. Further, on climate change, in principle, it is difficult for Japan to reduce the level of greenhouse gas emissions. Japan has already carried out nationwide energy conservation efforts since the two oil crises. Through these efforts, Japan has achieved the most efficient use of energy in the world. Japan's consumption of energy per GDP is nowadays one-third that of the United States and about one-half that of Germany. Japan is determined to engage in the vitally important issue of climate change. In concrete terms, Japan intends to decrease the volume of its carbon dioxide emissions in the industrial sector by 7% by the year 2010 and to increase the fuel efficiency of its automobiles by more than 20%. Japan also aims to reduce the energy consumption of household appliances such as air-conditioning, refrigerators, televisions, etc., by up to 30%. We further intend to develop new sources of energy that will provide up to three times the current level, and to increase total nuclear energy by the equivalent of up to 20 nuclear power plants.

   Lastly, on the issue of membership, Japan supports the early participation of Peru, Viet Nam and the Russian Federation in APEC. Prime Minister Hashimoto is expected to talk on this subject, as well.

   Having said that, I would like to once again remind today at 18:00 at the Georgia Hotel. I am sure that the Prime Minister will be happy to tell you what he actually said to his colleagues at the Leaders Meeting. That is the statement I wanted to make, and I will be delighted to answer any questions that you have.

3. Japanese environmental policy

   Q: You said that the Prime Minister wanted to make a strong statement in the Declaration about the Asian financial situation. Was there any resistance from officials from Canada or the United States on that before they drafted the Declaration?

   Spokesperson for the Prime Minister of Japan Hiroshi Hashimoto: When I say that the Prime Minister is expected to make a strong case, I was referring to the environmental issue. This does not necessarily mean that he insists that his presentation should be virtually included in the Declaration itself. What I mean is that the Declaration is prepared by the Canadian Chair. Referring to what I said, the Prime Minister may verbally make a strong case regarding this issue. As far as the Canadian position is concerned, we understand that they have not yet taken a position. We sincerely hope that the Canadian Government will hasten to take a position in a spirit of cooperation to make the Kyoto Conference a success. As far as the U.S. position is concerned, we do not consider that the present U.S. proposal is flexible enough. All the members of the Kyoto Conference have their own difficulties in reducing greenhouse gas emissions. So, the Government of Japan has been asking both the United States and the European Union to show more flexibility in their original proposals. The time is rather limited. But, unless we can narrow the gaps in the proposals between the United States and the European Union, the Kyoto Conference is doomed to failure. Therefore, Japan will continue making the utmost efforts to make a consensus among the members of the Kyoto, especially between the United States and the European Union, as well as efforts regarding developing nations. As I told you, the Prime Minister is expected to announce some specific measures in assisting the efforts of the developing countries on this subject. We hope that the developing members of APEC will appreciate the importance of this, and thus show more cooperative attitudes toward the Kyoto Conference.

4. Early voluntary sectoral liberalization (EVSL)

   Q: On the trade side, does the Prime Minister expect there to be any additional discussions regarding the trade initiatives laid out earlier in the conference by the ministers? Specifically, what is the Prime Minister's position regarding Japan's participation on voluntary liberalization in the forest products area?

   A: The Foreign Minister of Japan and the Minister of International Trade and Industry have reported the outcome of the APEC Ministerial Meeting to the Prime Minister. The Prime Minister is happy about the outcome. Unless the other Leaders pick up the issue of the early voluntary sectoral liberalization (EVSL), I do not think that the Prime Minister Hashimoto particularly intends to make a particular statement on this. I am sure that he is happy about the new scheme of the EVSL.

5. Currency crisis in Asia

   Q: Yesterday President Clinton suggested before his meeting with Prime Mini ster Hashimoto that Japan take a leading role to help the Asian countries resolve the currency crisis. What is your Prime Minister's response to this?

   A: Yesterday, President Clinton told Prime Minister Hashimoto that it is necessary for Japan's economy to achieve a strong recovery, in order to see the Asian economies stabilize. But, they did not discuss this subject in detail. The Prime Minister expressed his determination to deregulate the Japanese economy in line with the economic package which the Japanese Government announced very recently. He exchanged views with President Clinton on the currency instability in Asia. However, Prime Minister Hashimoto did not specifically make a comment on what President Clinton said about the interrelationship between the Japanese economy and the ASEAN economies. I am not here to make interpretations on what President Clinton said, but all of us understand that the interdependence among the economies is deepening. And, Japan, as the second largest economy in the world, can have an influence on the rest of the world. Therefore if the pace of the economic growth of Japan is slowed down, it will negatively effect the rest of the world, including Asia. Japan is endeavoring to achieve sustainable economic development for the sake of Japan. But, if Japan succeeds in this regard, the other economies, including the Asian economies, can benefit from this.

6. Assistance for Asian economies

   Q: Is there any chance at all that Japan would pursue the idea of a separate fund, not withstanding the Manila Arrangements?

   A: In regard to the original idea of the Asian Monetary Fund (AMF), we are of the view that the objectives of the establishment of the AMF is compatible with the newly agreed Manila Arrangement. And, we have got to work out the details of the operations of the new Manila Arrangement. So, I do not think that people are now talking about the Asian Monetary Fund. Having said that, I would like to quickly remind you that Japan has committed itself to extend support to Thailand and Indonesia. If the agreement is made between the International Monetary Fund (IMF) and the Republic of Korea, the Government of Japan will take appropriate measures to assist in the efforts to recover their economies on the side of the Government of the Republic of Korea. We are still not sure whether the Manila Arrangement will be put into practice by the time of the agreement between the IMF and the Republic of Korea, or whether additional money will be needed for the Republic of Korea after this agreement is made.

7. Japan's initiatives on greenhouse gas emissions

   Q: The new initiatives that the Prime Minister is going to announce, in terms of helping the developing countries on greenhouse emissions, would that involve money?

   A: I am not positive that this has been announced yet, therefore I am not in a position to comment on this. When you say money, what do you have in mind? Japan is extending, for example, Official Development Assistance (ODA) to the developing countries. In the past, we utilized this method for environmental purposes. For example, when the Rio de Janeiro United Nations Conference on Environment and Development (UNCED) took place, Japan pledged to extend a substantial amount of ODA for the development of environmental projects. In fact, we carried out the promise. I do not think that the Prime Minister is going to announce those kinds of measures this time, because the Japanese Government unfortunately now suffers from a budget deficit, but I am sure that he will announce some specific measures which the members of APEC will appreciate.

8. Japan's other environmental measures

   Q: And the other things that you said about the 7% reduction in the industrial sector, all the way down to 20 nuclear power plants, that is not new, right?

   A: No. That is Japan's effort.

9. The prominence of the currency issue in APEC discussions

   Q: Given so much attention being focused on the currency issue, is there a sense that the Leaders have glossed over the other APEC agenda? Has the main agenda has been nullified? Can you comment on that?

   A: As far as Japan is concerned, already the Ministers have done their job very well. Therefore the Prime Minister would like to touch on the currency issue, in view of the fact that APEC members should not lose the momentum of trade and investment liberalization and facilitation, although several Asian members face economic difficulties and currency instability. When they talk about the currency issue, the Prime Minister always keeps in mind the future of the APEC liberalization process. At the same time, as I told you, the other issues will be touched upon by the Leaders, such as infrastructure. It is very important to talk and try to take additional measures for the development of infrastructure among the APEC members in order to enjoy good economic growth from a medium- and long-term perspective. It is very appropriate already to exchange views on electronic commerce, in addition to what the Ministers talked about. The environment is a very current issue. So it is very appropriate that the Prime Minister of Japan will make a case for this. Probably this afternoon, each Leader -- of course, it is completely up to the Leader -- may talk about further efforts for trade and investment liberalization and facilitation. They will further talk about Ecotech, human resources development, the women in development issue, etc. So, you should not interpret that the Leaders this time only talked about the currency issue.

10. Leaders' political message on financial issues

    Q: Concerning how to address the financial issues in the communique, has the Japanese Prime Minister suggested anything concrete? When you talk about the Prime Minister making a strong case about the financial issues in the communique, has the Prime Minister suggested anything concrete to put into the communique?

    A: As far as the Declaration of the Leaders is concerned, on the basis of what the Canadian Chair has prepared up until now, I think the Leaders themselves may add something new to it. It is completely up to them. As far as Japan is concerned, I do not think the Prime Minister will state anything specific on an individual case. If, for example, you have in mind the case of the Republic of Korea, I do not think that the Prime Minister will make a specific statement on this (in concrete terms).

11. Japan-People's Republic of China bilateral contacts

    Q: Also, has the bilateral meeting between the Japanese Prime Minister and the Chinese President taken place yet?

    A: I am terribly sorry; I misled you. This time, Prime Minister Hashimoto and President Jiang Zemin will not meet. Chairman Jiang Zemin will visit Japan officially next year.

12. Japan's participation in the EVSL process

    Q: Following up on my earlier question, I just wanted to clarify, then: you indicated that the Prime Minister was pleased with the results of the EVSL talks. Does that mean that Japan is supportive of going ahead and reducing tariffs on all nine of those sectors, including forest products?

    A: Japan has decided to participate in the joint efforts in the EVSL. The senior experts of the APEC members will work out what they should do to implement the EVSL scheme by next year's Trade Ministers Meeting in Kuchin. Therefore it is a bit too early for us to tell you what the Japanese Government is specifically going to do in preparation for the new scheme. We emphasize that we have decided to participate in this scheme, with the understanding that the principle of voluntarism is firmly applied. At the same time, we know that the component of the EVSL is not limited to the reduction of tariffs; it includes non-tariff barriers, technical cooperation, etc. Therefore, what I can tell you now is that the experts have enormous responsibilities to prepare the draft scheme for the June Trade Ministers' Meeting.

    Q: So it will be a matter, from Japan's standpoint, of waiting to see what the more concrete plan is before making decisions on individual sectors, on whether you will participate fully in the plan or not?

    A: It is true that we have not decided anything on the detail of implementing the EVSL yet.

13. Japan's stance on currency speculation

    Q: Let's have your wish on the discussions on the currency manipulators.

    A: I have not been briefed by my colleagues (on the morning session of the Leaders' Meeting), but according to what the Canadian Chair told you, that matter was not discussed this morning. That is what I know.

14. Strength of Leaders' political message on financial issues

    Q: You said before that it was necessary for APEC Leaders to convey a strong message of cooperation to halt the image of financial instability. So how strong will their message be in the Declaration? Do you think that it will be very similar to the draft communique that has been floating around?

    A: That will completely reflect the actual discussions at the Leaders' Meeting; therefore I do not know the final wording of the Declaration. We will just wait and see what the Declaration will say about this issue.

    Q: But you must have some indication of how strong a wording this will be.

    A: I understand that the Leaders will not talk in detail on this issue. But we need a politically strong message. The Prime Minister hopes that his wish will objectively reflect the Declaration.

15. Japan's model for dealing with financial institutions in crisis

    Q: I understand, as we speak, that there are groups in Japan that are calling for the Government to help bail out Yamaichi, and certainly not to let any other major financial institutions go under. I wonder if you could speak to the challenges or difficulties facing many of these Asian Leaders as they return home in implementing some of these pledges of support, both for structural reform as well as for trade liberalization.

    A: I cannot add anything to what my colleague Mr. Kuroda said last night. I am sure that the Prime Minister today -- I do not actually know what he said or is going to do -- but I presume to say that the principle of self-sustainability is very important. He may also touch upon the importance of implementing the conditionalities of the IMF if any country is falling into trouble, so that the country has to seek the assistance of the IMF. There is no miraculous formula to recover a high speed of economic development. Each APEC member, including Japan, is obliged to continuously make efforts to restructure its own economy. It is a painstaking process. But I think this is how the Prime Minister and the Japanese Government basically consider this. Of course, irrespective of the individual statement by any APEC Leader, Japan would like to recover a good pace in its economic development. But this does not necessarily mean that we can easily do so. In the past, for example, we could apply large-scale fiscal measures, but because of the enormous government debt, we are not in a position to do so. So what we can do nowadays is to deregulate our economy to give more freedom to the private sector to operate their activities, rather than relying on Japanese regulations or trying to increase the possibility of the effective use of lands or trying to help small and medium enterprises' activities, etc. It means that it will take some time to bite into the economy through these measures. But Japan has no intention of going back to the old formula of relying on exports or applying very large-scale fiscal measures and so on. So for you, probably, what the Leaders, especially the Prime Minister of Japan, is saying is not anything new; however, we sincerely hope that the APEC Leaders can jointly state that they are determined to achieve sustainable economic development, and we hope that the confidence of the markets in the future of the APEC economies will recover soon. Thank you very much.