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Press Conference by Prime Minister Keizo Obuchi

13 September, 1999

[This transcript is based on English-Language simultaneous interpretation and does not reflect an official record of the statements of the Prime Minister - which were in Japanese]

Press Briefing 13 September, 1999

1. Opening Statement
2. Expectations on the performance of the Japanese economy
3. Position of the Government of Japan regarding the possible freezing of missile launches by North Korea
4. Position of the Government of Japan regarding the situation in East Timor
5. Position of the Government of Japan on World Trade Organization (WTO) rules
6. Impact of the increase in the value of the Japanese yen

1. Opening Statement

   Prime Minister Keizo Obuchi: I would like to thank you for coming. Having attended this Leaders Meeting in the tenth year since the launching of APEC, I have renewed my impressions that solidarity among the Asia Pacific has been growing stronger. APEC, needless to say, is a forum to discuss economic cooperation and not to discuss politics. However, I sense that the spirit of cooperation now seems to be starting to expand in a natural way to the issues of East Timor and others, matters of immediate concern to all leaders gathered here.

   Let me spell out three points as results of the Leaders Meeting. First, to further solidify the recovery of the economies that are now showing signs of growing out of the serious economic crisis, all APEC members have collectively shown their resolve to resume our march toward regional prosperity by strengthening markets through regulatory reforms and the promotion of competition, as well as structural reforms and human resources development. During the discussion on the Asian economy, participating leaders expressed their strong expectations for the Japanese economy, which now has gone over the hill and is moving toward recovery. They also expressed their appreciation for Japan's financial cooperation amounting to some US$80 billion.

   Secondly, we have sent out a political message to successfully launch the new round of WTO trade negotiations at the upcoming Seattle Ministerial Meeting of the WTO in November. Japan has been advocating that the new WTO round should encompass a broad range of issues, including WTO rules and discipline, in addition to market opening, and they should be negotiated in a single package. APEC members agreed on this overall framework for the negotiations this time. One of the major pillars of APEC's activity is trade and investment liberalization. It should continue to play a leading role in the world economy, especially to strengthen the multilateral trading system.

   Thirdly, APEC does not belong solely to heads of state and government ministers or bureaucrats. APEC can truly blossom only when industry, or more broadly, people of all strata, are able to avail themselves of the fruits of APEC. Further integration of women into society should be one important aspect of this. We were also able to affirm our resolve as leaders of the Asia Pacific to cooperate with strong interest on the Y2K issue and e-commerce among others, that need to be addressed for their global development. Such cooperation should lead to exponential expansion of business opportunities into the 21st century.

   East Timor remains in a very difficult situation. As a long-time friend of Indonesia, Japan has very candidly communicated to the Indonesians that the responsibility to rectify this unacceptable situation and to restore order in East Timor lies with the Indonesian Government. If the Indonesian Government cannot discharge that responsibility, it should immediately accept support by the international community to address the situation. At the same time, it goes without saying that Indonesia's political and economic stability is extremely important for the stability of Asia as a whole. This point needs to be given due consideration particularly now that signs of recovery at long last are becoming visible in Asia.

   Taking advantage of the various meetings with the leaders, including Indonesian Coordinating Minister Ginanjar, on the sidelines of the APEC Leaders Meeting, I have tried to explain Japan's position, which I have just spelt out, in an attempt to find an effective solution to the situation, which would pay consideration to Indonesia's dignity. Against this backdrop, President Habibie of indonesia announced last night that Indonesia will accept international peacekeeping forces to restore order in East Timor. This was no easy decision for the Indonesian Government to make, and we welcome this decision which they have reached on their own initiative. We very much hope that coordination on modalities of acceptance of forces and other matters will be completed expeditiously and the situation in East Timor will stabilize as soon as possible. Japan will cooperate for the resolution of the problem through contributions to international peacekeeping forces, humanitarian activities and furthermore, medium- to long-term reconstruction and development efforts, and provide support as much as possible.

   On North Korea, Japan, the United States of America and the Republic of Korea to date have been coordinating closely with each other. The meeting of the leaders of the three countries this time symbolized that strong solidarity among the three. At the meeting, the three countries expressed their expectations that the comprehensive and integrated approach built up jointly by the three, will provide an invaluable opportunity to ensure peace and stability on the Korean Peninsula. They also expressed the hope that North Korea will respond positively. As you know, the US-North Korea talks in Berlin produced positive progress on the missile issue, US sanctions against North Korea and other issues during the night on 12 September. Japan appreciates and welcomes this.

   We hope that this process will move forward to ensure peace and stability on the Korean Peninsula. I would also like to tell you on this occasion that I had meaningful meetings, though short in time, with President Jiang Zemin of China, President Joseph Estrada of the Philippines and Prime Minister Vladimir Putin of Russia.

   These are my impressions of the meetings here. Last but not least, I wish to pay tribute to Prime Minister Jenny Shipley for her outstanding chairmanship. May I also extend my heartfelt gratitude to the Government of New Zealand and the citizens of Auckland for their very warm welcome and hospitality.

2. Expectations on the performance of the Japanese economy

   Kyodo Press: At this APEC meeting, you made appeals on the recovery of the Japanese economy. There will be higher expectations placed on the Japanese economy as the "locomotive" of the Asian economy. In the economic domain, what messages will Japan be transmitting to Asia and the world at large? What is the size and the schedule of the second supplementary budget and the timing of the summoning of the extraordinary Diet session as well?

   Prime Minister Keizo Obuchi: On the Japanese economy, in the first two quarters of this year, we registered positive growth, so we are over the worst now. I believe we are over the hill, so to speak. Without loosening our efforts, we shall continue to aim at a full-fledged recovery of the Japanese economy, which has a major impact on the Asian economy, and continue with very positive economic management. With regard to the second supplementary budget, if, after the election of the LDP presidency, it turns out that I am given the responsibility to manage the Cabinet again, I should like to consider, under the new Cabinet, more specifically the drawing of the second supplementary budget for FY 1999 building on the basic perception of the 14-month budget. If I may also mention, at this APEC Meeting, we heard certain words of appreciation that in the midst of great disruptions of the Asian economy, Japan provided support to them amounting to approximately US$80 billion. In their respective economies, they now are already achieving economic performances that surpass Japan's. In this respect, I believe that the Asian economy will be moving on to a full-fledged recovery and Japan will be cooperationg with them together. We shall move together, and once again the leaders expressed their appreciation for Japan's policy through which we provide support to them and we realize that we have to continue to do our best in this regard.

3. Position of the Government of Japan regarding the possible freezing of missile launches by North Korea

   Andrea Koppel, CNN: Mr. Prime Minister, you said that you welcomed the announcement in Berlin that there had been an agreement in principle for North Korea to freeze its missile testing program. The United States has indicated that it would go forward with normalizing its relationship with the North. What can North Korea expect from the Japanese Government?

   Prime Minister Keizo Obuchi: As for the Government of Japan, we certainly appreciate and welcome the progress seen in the US-North Korea talks this time, as I mentioned. However, we are not going to take this as the achievement of the firm freezing of a missile launch by North Korea. Should the North Koreans make this intent to freeze the launch a firm one, then Japan will be prepared to consider the lifting of the measures Japan put in place in response to the missile launch by the North Koreans in August of last year. As far as Japan is concerned, we shall continue to maintain close coordination with the US and the Republic of Korea. We have been approaching the North Koreans, telling them that building positive relations with Japan, the US and the Republic of Korea by refraining from yet another launching of missiles would be a much greater benefit for North Korea. We have made this point repeatedly in order to encourage a positive response from North Korea. By communicating this position of Japan through various opportunities and through direct dialogue, we should like to strive to create a climate in which we shall be able to lift these measures we introduced last year. Once again if I may say, the senior officials of the US and North Korea were engaged in discussions, and have made progress in this regard. Certainly I believe that this is progress in this regard. Certainly I believe that this is progress in a very good direction. However we are not privy to all the details of the content of their agreement or understanding. With regard to the fact that they have concluded their talks, that is something we would like to appreciate. Should that prove to provide impetus to normalization of relations between Japan and North Korea, that certainly would be most gratifying. Having said that, whether this agreement means that North Korea has firmly decided to freeze their missile launch or not we cannot really judge until we see a further response from North Korea. Our basic stance is for dialogue and deterrence with the hope that perhaps the results of the US-North Korea talks would give us some tilt toward dialogue. This is how I appreciate the results of their talks this time.

4. Position of the Government of Japan regarding the situation in East Timor

   Ms. Okoshi, NHK: I would like to raise some questions concerning East Timor. President Habibie of Indonesia has announced that Indonesia will be accepting the dispatch of international peacekeeping forces to East Timor. Respective countries have offered to dispatch their military forces. It will be difficult for Japan to make military contributions, it is easy to imagine. In concrete terms, in order to improve the security situation in Indonesia, what kind of contributions will Japan be able to make according to your thoughts?

   Prime Minister Keizo Obuchi: Thank you. As I mentioned in my opening remarks, Japan wishes to provide its utmost support in the interests of peaceful resolution of the problem in East Timor. However, with regard to the modalities of the international peacekeeping force that will be dispatched to East Timor, I believe they will be determined through consultations with the United Nations. We shall build on the results of those consultations in determining what specific contributions Japan will be able to make. Thanks to the decision made by Indonesia and President Habibie, this international force likely will be sent and make its contributions to the stability of East Timor. Talks have already started at the UN in New York to that end. The question was what sort of contributions Japan can make in this process. But the basic question is the modalities of such forces and I cannot say anything definitively at this time. Having said that, the fact is that the East Timorese will became clear through the referendum and in accordance with the will of the people, we very much hope that good governance will prevail in East Timor. Yet, we understand from press reports that day-in day-out there are many people who are falling victim and we therefore believe that through international means support really should be provided to resolve the situation as expeditiously as possible. Japan shall consider very seriously what Japan can do in order to discharge Japan's responsibility in this process as well.

5. Position of the Government of Japan on World Trade Organization (WTO) rules

   Ms. Yuri Kageyama, AP: At APEC, Japan has asserted that at the WTO rules such as those on anti-dumping should be looked at during the next round. What are your views and do you feel that the United States tends to be too protectionist in this regard?

   Prime Minister Keizo Obuchi: At the PEC Leaders' Meeting this time -- I believe the question is what sort of results we were able to reach with regard to the WTO. We reached a consensus amongst us that there should be a sufficiently broad agenda which is well-balanced, including WTO rules and disciplines in addition to market access and that these should be negotiated in one package. The fact that APEC members agreed on the overall framework for such negotiations as described, I believe it means that we have produced adequate results towards the successful Seattle Ministerial Meeting. The representatives of the 21 economies and areas engaged in discussions towards the launching of a new round and we have set the direction towards the negotiations for the WTO. I think that was an important result that we have achieved.

6. Impact of the increase in the value of the Japanese yen

   Mr. Bruce Ellaworth, Bridge News: Prime Minister Obuchi, you said earlier that you wanted to help Japan to recover as a way to help Asian economies as a whole to recover. I noticed that recently the Japanese yen has been strengthening and many Japanese senior government officials have been worried that the stronger yen will hurt the chances for Japanese recovery. Are you concerned about the recent strengthening of the yen and what do you think should be done about it? Thank you.

   Prime Minister Keizo Obuchi: A rapid yen appreciation may certainly have a major impact on the Japanese economy, needless to say. In this respect, in the Japanese economy, especially in the Japanese industry, especially in the export-related industry, it is feared that rapid yen appreciation would become a major problem that effects their business viability. Having said that, I think a yen appreciation would reflect a stronger tendency of stronger confidence in the Japanese recovery, the Japanese economy. That in itself certainly is not a problem, but an excessively strong yen I believe would have two major impacts on the Japanese economy. Should the yen strengthen further then that would in certain respects mean that Asian exports to Japan will increase and in this manner, yen appreciation should have a favorable impact on the Asian economies. So it really is a question of degree. But I think that appropriate relations between the yen and the dollar, yen and the euro should -- I believe any excessively rapid fluctuations would not be welcome. But these certainly would have impact on the economy. We shall carefully watch these developments and consider how properly to respond to those developments.