Chapter I.
General Overview- The International Community and Japan's Foreign Policy in 1996

B. Relations with the United States and Other Countries and Regions

1. Japan-United States Relations

a) Overview

Through bilateral dialogue and cooperation at many different levels, Japan and the United States further developed their cooperative relationships in a wide range of areas in 1996, including political, security-related, economic and global issues. At the same time, the two countries also built a strong foundation for continued bilateral cooperation in the future.

In particular, President Clinton's visit to Japan as a state guest in April led to success in defining the course of future Japan-U.S. relations, which contributed greatly to the enhancement of bilateral relations. During this visit, Prime Minister Hashimoto and President Clinton issued two documents, the "Message from Prime Minister Hashimoto and President Clinton to the Peoples of Japan and the United States" and the "Japan-U.S. Joint Declaration on Security." In addition to reaffirming the importance of Japan-U.S. cooperation in a wide range of areas, these two documents outlined for the citizens of the two countries the significance and importance of Japan-U.S. relations as the 21st century approaches.

The Message from Prime Minister Hashimoto and President Clinton to the Peoples of Japan and the United States confirms both countries' shared commitment to democracy and freedom; addresses issues such as bilateral cooperation in the Asia-Pacific region, as well as cooperation in UN reforms, disarmament and nuclear non-proliferation; touches upon economic relations as well as the Common Agenda; explains the importance of the bilateral relationship to the people of both countries; and clarifies how the two countries will cooperate in the future. The Japan-U.S. Joint Declaration on Security, which serves as a basis for bilateral cooperation toward the future, reaffirms that the Japan-U.S. Security Arrangements continue to play an important role in the security of Japan as well as in peace and prosperity in the Asia-Pacific region.

Bilateral cooperation was further strengthened throughout 1996. Joint efforts were made to enhance the security relationship, and both countries cooperated on a number of issues in the field of economic relations.

Japan and the United States are engaged in various endeavors to strengthen the Japan-U.S. Security Arrangements, based on the Japan-U.S. Joint Declaration on Security. With regard to issues related to Okinawa, such as the consolidation, realignment and reduction of U.S. facilities and areas in Okinawa, the governments of Japan and the United States have been working intensely for over a year to reduce the burden on the people of Okinawa. The results of these efforts are summed up in the Final Report of the Special Action Committee on Okinawa (SACO). (For further details on the Japan-U.S. Security Arrangements and United States facilities and areas in Okinawa Prefecture, see Chapter II, Part A.)

In the area of economic relations, the two countries have made solid progress on a number of specific economic issues, with talks on the semiconductor and insurance areas coming to successful conclusions in August and December, respectively.

Prime Minister Hashimoto and President Clinton conducted five Summit Meetings in 1996 alone. Through frank exchanges of views, the two leaders built up a strong relationship of personal trust, thereby laying the foundation for excellent bilateral relations. The relationship of trust between the two leaders symbolically shows that close personal dialogue and exchanges are indispensable to friendship between nations, and efforts by individual Japanese and Americans to achieve mutual trust and understanding are extremely important to friendly bilateral relations.

b) Japan-U.S. Economic Relations

Japan and the United States enjoyed generally good economic relations in 1996, a year which witnessed a large reduction in the U.S. trade deficit with Japan. (In 1996, the U.S. trade deficit with Japan fell 19.4% from the 1995 figure and accounted for 28.6% of the total U.S. trade deficit, down sharply from the 65% figure for 1991.) Both countries share views concerning the continuing importance of the U.S.-Japan Framework Talks (an economic dialogue format with three main focal points: macroeconomic issues; sectoral and structural issues; and the Common Agenda), which have been playing a key role in the management of the bilateral economic relationship.

Talks since August 1994 on sectoral and structural issues have reached successful conclusions in all the initial target areas of the U.S.-Japan Framework Talks, including intellectual property; government procurement in the fields of telecommunications and medical technology; flat glass; financial services; investment and corporate relations; and autos and auto parts. Also, in early 1996 the United States raised four issues (semiconductors, insurance, aviation and photographic film) as priority targets, of which two (semiconductors and insurance) were resolved by the end of the year. (For more information on specific economic issues between Japan and the United States, see Chapter III, Part B.)

c) The Japan-U.S. Common Agenda for Cooperation in Global Perspective

The Common Agenda, one of the major pillars of the U.S.-Japan Framework Talks, is a framework for cooperation under which Japan and the United States collaborate to seek solutions to increasingly serious global challenges in fields such as the environment and population. Launched in 1993, the Common Agenda comprises a number of cooperative efforts addressing the following themes: promotion of health and human resources; responding to challenges to global stability; protection of the global environment; advancement of science and technology; and fostering exchanges for mutual understanding. At the Japan-U.S. Summit Meeting in April, the Common Agenda was expanded to include six new initiatives, namely, "Emerging and Re-emerging Infectious Diseases," "Natural Disaster Reduction," "Civil Society and Democratization," "Counterterrorism," "Global Food Supply" and "Educational Technology for the 21st Century," bringing the total number of areas to 26. Steady progress is being achieved, and progress reports on these initiatives were delivered at the Vice-Ministerial Plenary Meeting in June.

In September, Prime Minister Hashimoto proposed that a world conference be held so that the Common Agenda, while continuing to be run principally by the governments of Japan and the United States, might be expanded to include participation by private sectors and other countries.

Furthermore, in order to promote a deeper understanding of the Common Agenda among the general public and foster a stronger public-private partnership, the Common Agenda Round Table (chaired by Gaishi Hiraiwa, honorary chairman of the Japan Federation of Economic Organizations), the membership of which is mainly key figures from Japan's private sector, was established in February 1996. (The Fourth Common Agenda Round Table Conference was held in January 1997.)

d) Personal Contacts and Exchanges

Recognizing the importance of promoting greater exchange and mutual understanding between Japanese and American youth, who will lead the world in the 21st century, the Government of Japan is promoting a comprehensive initiative targeted at American high school students, college and graduate students, college graduates, teachers, young researchers, young artists and other youth to enhance their understanding of Japan, with the purpose of providing more American young people with opportunities to learn about Japan. The United States, for its part, has initiated the Mansfield Plan, in which U.S. government officials engage in training activities in Japan with the aim of fostering experts on Japanese politics, economics and culture within the U.S. Government. The first participant in this program studied Japanese for about a year in Washington, D.C. and has been participating in internships at various ministries and agencies in Japan since September.

e) Toward the 21st Century

Former foes on the battlefield, Japan and the United States have built a strong bilateral relationship in the 50 years since the end of World War II based on the shared basic values of freedom, democracy and market economy principles. Today, a good relationship between Japan and the United States has become essential for the peace and prosperity not only of Japan and the United States, but of the Asia-Pacific region and the world as a whole. Japan-U.S. relations are the axis of Japan's foreign policy.

With President Clinton's visit to Japan in April 1996, Japan and the United States have taken a new historic step toward the 21st century. During this visit, the heads of state repeatedly stressed to the peoples of both nations the importance of Japan-U.S. relations. Individual links between the peoples of Japan and the United States will be the strongest force for overcoming all difficulties that the two countries may face in the future and for maintaining the strong bilateral relationship. For that reason, it is essential for the peace and prosperity of not only the two countries but also the whole world that every citizen of Japan and the United States feel a personal responsibility to uphold the Japan-U.S. relationship, fully recognizing its importance, and to enhance mutual understanding as partners working toward the prosperity of the world.

2. Japan-China Relations

a) Overview

Japan-China relations faced difficulties in 1996 due to several factors, including the military exercises carried out by China off the coast of Taiwan at the time of the elections for Taiwan's leadership; China's two nuclear tests; a series of events related to the Senkaku Islands; and the interpretation of history. Nevertheless, efforts have been made to improve relations through exchanges of views at various levels, and both nations shared the view at the Japan-China Summit Meeting held during the APEC Meetings in November that Japan-China relations are important and essential for peace and prosperity throughout the Asia-Pacific region and the entire world, and that, in light of this fact, the two countries should make an effort to further improve their bilateral relationship.

b) Issues Related to Japan-China Relations

When China carried out a series of military exercises, including the firing of missiles, off the coast of Taiwan at the time of elections in Taiwan in March, Japan called upon China to exercise self-restraint. Then, after China expressed concern regarding the Japan-U.S. Joint Declaration on Security that was issued during President Clinton's visit to Japan in April, Japan took every opportunity to explain to China the content of the Joint Declaration.

In addition, Japan expressed deep regret over both nuclear tests carried out by China in 1996, and called upon China to work toward nuclear disarmament. At the time of the second nuclear test, which occurred on 28 July, China announced a moratorium on nuclear tests effective 29 July. On 24 September it signed the Comprehensive Test Ban Treaty (CTBT).

In July, a Japanese group's establishment of a lighthouse on one of the Senkaku Islands sparked a wave of anti-Japanese protests, especially in Hong Kong and Taiwan. Invasion of Japanese territorial waters and illegal landings on the islands ensued, and China lodged a vigorous protest. While maintaining its basic position that the Senkaku Islands are an integral part of Japan's territory, and that Japan in fact has effective control over these, Japan reacted calmly to prevent the issue from adversely impacting the development of sound Japan-China relations. Also, in the months following July, various matters related to the interpretation of history, such as visits to the Yasukuni Shrine, elicited strong responses from China.

During a meeting between the Japanese and Chinese foreign ministers in September on the occasion of the UN General Assembly, however, and during the Summit Meeting between Prime Minister Hashimoto and President Jiang Zemin during the APEC Meetings in November, it was agreed that the Japan-China relationship is important not only for the two countries, but also for peace and prosperity throughout the Asia-Pacific region and the entire world, and that in light of this importance, both countries should work to enhance bilateral relations.

In addition, Japan and China conducted talks regarding various other outstanding issues between the two countries, including matters related to the disposal of chemical weapons abandoned in China by the former Japanese Imperial Army, and the conclusion of a new Japan-China fisheries agreement in accordance with the United Nations Convention on the Law of the Sea. Also, the FY1996 provision of a yen loan to China was decided upon in December.

c) Relations with Hong Kong and Taiwan

Japan has stated its view that after Hong Kong's return to China in July 1997, it is important to maintain the liberal systems under the rule of law which have constituted the basis of Hong Kong's prosperity. In addition to inviting Lu Ping, Director of the Hong Kong and Macao Affairs Office, to Japan in June to communicate Japan's views directly to the Chinese side, frank exchanges of opinion were also carried out at various other opportunities, including Foreign Minister Ikeda's trip to Hong Kong in August and Hong Kong Governor Christopher Patten's visit to Japan in November.

Japan keeps relations with Taiwan only on the unofficial level, but with communication between contacts on both sides of the strait regarding the Taiwan issue suspended, Japan has taken every opportunity to express its strong desire that both parties seek a peaceful resolution.

d) The Outlook for 1997

While relations between Japan and China are becoming closer, it will be difficult to avoid friction, but it is important that both sides cooperate constructively in addressing bilateral issues as well as regional and global concerns, based upon the understanding that (1) the Japan-China relationship is important not only for the two nations, but also for peace and prosperity throughout the Asia-Pacific region and the entire world; and (2) in light of this importance, both countries share a serious responsibility to work to develop bilateral relations.

1997 marks the 25th anniversary of the normalization of relations between Japan and China, and it is expected to be an important juncture which will enhance friendly relations based on mutual trust toward the 21st century.

3. The Korean Peninsula

a) Relations between the North and South

On the Korean Peninsula, military forces continue to face each other across the demilitarized zone. In April, the Republic of Korea (ROK) and the United States proposed a Four-Party Meeting on achieving permanent peace on the Korean Peninsula. While North Korea has been showing no clear stance regarding this proposal, the submarine incident which occurred last September underscored the importance of reduction of tensions on the Korean Peninsula. Japan, the United States and the ROK have been carrying out close consultations regarding the situation on the Korean Peninsula, including meetings between their respective ministers of foreign affairs and consultations at the senior official level.

b) The Proposed Four-Party Meeting and the Grounding of a North Korean Submarine

Claiming that the ROK has not signed the Korean armistice agreement, North Korea has continued to try to conclude a separate peace agreement with the United States while excluding the ROK. In line with the statement by the First Vice Minister of the Ministry of the People's Armed Forces at the end of March, to the effect that the current cease-fire situation had reached its limit, North Korea has repeatedly made demonstrations of force for three consecutive nights (5-7 April), sending a company-level armed force into the joint security area at Panmunjom and then withdrew them two to three hours later.

On 16 April, Republic of Korea President Kim Young Sam and U.S. President Clinton met for Summit Talks in Cheju, after which they proposed the holding, without preconditions, of a Four-Party Meeting between the ROK, North Korea, the United States and China as soon as possible to promote peace on the Korean Peninsula. This proposal would constitute an effort by North Korea and the ROK as the direct parties to the Korean Peninsula issue, as well as the United States and China, which have been directly involved in the armistice agreement, to achieve an agreement regarding permanent peace on the Korean Peninsula in place of the current armistice agreement. Japan immediately expressed support for the proposal. North Korea stated that the proposal for a Four-Party Meeting is under consideration, but has yet to adopt a clear-cut stance.

Meanwhile, a North Korean submarine was discovered grounded on 18 September near the city of Kannung, off the northeastern coast of the ROK. North Korea described the grounding as an accident and did not respond with sincerity, declaring its right to retaliate as a victim, while the ROK demanded an apology and assurances that there would be no recurrence of such an event. On 16 October, the UN Security Council unanimously adopted the Chairman's Statement expressing "serious concern" over the incident. After a series of meetings ensued between the United States and North Korea, a spokesman for North Korea's Ministry of Foreign Affairs issued a statement on 29 December expressing "deep regret" for the submarine incident and announced to make effort to ensure that such an incident will not recur.

North Korea also announced its willingness to accept a proposal for a joint briefing in which the United States and the ROK will explain the Four-Party Meeting proposal, but it has adopted no clear stance regarding the Four-Party Meeting itself.

c) Humanitarian Assistance to North Korea

With flood damage caused by heavy rains in the summer of 1995, North Korea sought extensive assistance from various UN agencies and the international community. In response to an emergency humanitarian appeal announced by the UN Department of Humanitarian Affairs (DHA) in June for a total of US$43.6 million, Japan, in order to support the relief efforts of various UN agencies with a view to playing its due role as a member of the international community from the viewpoint of emergency and humanitarian assistance, and in close consultation with the ROK and the United States, made a contribution of US$6 million.

d) Korean Peninsula Energy Development Organization (KEDO)

The Korean Peninsula Energy Development Organization (KEDO) is an international agency established in March 1995 as the international consortium envisioned in the Agreed Framework between the United States and North Korea in October 1994. The purposes of KEDO are to provide for the financing and supply of a light-water reactor (LWR) project in North Korea, and to provide for the supply of interim energy alternatives.

KEDO and North Korea concluded an agreement in December 1995 on the supply of a light-water reactor project, and in 1996 the two sides negotiated protocols which lay out details of that agreement. Three protocols (regarding juridical status, privileges, immunities and consular protection; transportation; and communications) were signed and put into effect in July 1996. Also, Japan donated US$19 million in February 1996 to establish a special fund within KEDO to help KEDO respond quickly in case of liquidity difficulties.

For Japan's security, it is extremely important that efforts are made to resolve the problem of the development of nuclear weapons by North Korea. It is in this light that Japan has participated actively, along with the United States and the ROK, in the decision-making process of KEDO. In the area of human resources, Japan has dispatched policy-making staff and nuclear energy experts to serve on the KEDO Secretariat, and in the financial area, Japan has indicated its intention to play a significant role within the overall framework of the LWR project.

e) Japan-ROK Relations

In the area of Japan-ROK relations, it is important to keep the lessons of history in mind as the two countries build a stable, forward-looking relationship and cooperate on international issues. Japan-ROK Summit Talks have been held in Bangkok in March, in Cheju in June, in Manila in November and in Beppu in January 1997. In addition to bilateral issues and the situation on the Korean Peninsula, these talks have also addressed Japan-ROK cooperation in the international community, in light of the ROK membership in the OECD and in the United Nations Security Council as a non-permanent member.

In February 1996, the different positions of the two countries regarding the Takeshima Islands became the focus of attention, but in light of the view that it would not be appropriate to allow this issue to spark an emotional confrontation between the peoples of Japan and the ROK that might harm the friendly and cooperative bilateral relations, it was confirmed during the Summit Talks in March that measures to be taken according to the ratification of the UN Convention on the Law of the Sea would be on the basis of not affecting respective positions regarding the Takeshima Islands. In the June Summit both countries agreed, in accordance with the agreement in March, to work to draw up exclusive economic zone (EEZ) boundaries and to proceed with fisheries agreement negotiations, separating these issues from the territorial issue of the Takeshima Islands. It was also agreed to work to create an environment that will facilitate drawing of EEZ boundaries and progress in fisheries negotiations, by ensuring orderly fishing, etc. With regard to the fisheries negotiations, both sides agreed during the November Summit Talks to work together to accelerate efforts to establish a new fishery order based on the above-mentioned agreements and in line with the UN Convention on the Law of the Sea.

At the end of May, it was decided that Japan and the ROK will jointly host 2002 World Cup Soccer, and both heads of state agreed at the June Summit to use the World Cup as an opportunity to further develop bilateral friendly and cooperative relations. The two countries also shared the view on further promotion of youth exchanges.

4. Japan-Russian Federation Relations

With regard to relations between Japan and the Russian Federation, the Tokyo Declaration, which was signed during the visit of President Boris Yeltsin of the Russian Federation to Japan in October 1993, has been a cornerstone for bilateral relations. Japan's basic policy regarding diplomatic relations with Russia is to make every possible effort to resolve the Northern Territories issue based on the Tokyo Declaration, thereby concluding a peace treaty and fully normalizing relations between Japan and Russia. Japan, at the same time, supports Russia's reform initiatives and is working to cooperate and strengthen relations in a wide range of fields.

Closer political dialogue was carried out in 1996, which marked the 40th anniversary of the Japan-Soviet Joint Declaration of 1956 which restored diplomatic relations. Foreign Minister Ikeda visited Russia in March and met with President Yeltsin. The Sixth Japan-Russia Foreign Ministers' Regular Consultations and the First Session of the Japan-Russian Federation Inter-Governmental Committee on Trade and Economic Affairs were held at this time, expanding political and economic ties between Japan and Russia. In April, while visiting Russia to attend the Nuclear Power Safety Summit, Prime Minister Hashimoto held a bilateral meeting with President Yeltsin during which the two agreed to expedite peace treaty negotiations at the foreign ministerial level, to resume the Working Group on a Peace Treaty Between Japan and Russia at the vice-ministerial level after the presidential elections, to arrange a visit to Russia by Japan's Director-General of the Defense Agency, and to strengthen and develop relations between Japan and Russia in the Russian Far East. As a result, Director-General Hideo Usui of the Defense Agency visited Russia that same month, building trust between the defense authorities in both countries and charting a course for the development of bilateral relations by means of security dialogue. Thereafter, both Ministers of Foreign Affairs met in June at the Lyon Summit, in July at the ASEAN Regional Forum and in September at the UN General Assembly. In October, Japan and Russia held the Sixth Working Group on a Peace Treaty between Japan and Russia and the Japan-Russia Working-level Consultations. In November, Foreign Minister Yevgeny Primakov visited Japan, where he and Foreign Minister Ikeda held the Seventh Japan-Russia Foreign Ministers' Regular Consultations, at which both parties reaffirmed their intention to pursue bilateral relations in accordance with the terms of the Tokyo Declaration. With regard to the issue of territorial sovereignty, Japan emphasized its view that Japan and Russia must press ahead simultaneously with both territorial negotiations and efforts to create an environment conducive to the resolution of territorial issues. Russia put forward the idea (the details of which have not yet been fully studied) that both countries could engage in joint economic activities on the four islands while maintaining their respective positions regarding the sovereignty of these islands.

Russian national border guard vessels continued their "enforcing" activities in the waters surrounding the four northern islands in 1996, which led in October to the seizure of a vessel near Kunashiri Island. In 1995, the governments of Japan and Russia initiated negotiations aimed at establishing a framework which will allow Japanese fishing vessels to operate safely in the waters surrounding the four northern islands without impairing the position of either country. These negotiations continued in 1996, with seven sessions held thus far.

In terms of economic relations between the two countries, the aforementioned First Session of the Japan-Russian Federation Inter-Governmental Committee on Trade and Economic Affairs (the establishment of which, as previously mentioned, was decided upon by both governments in November 1994) was held in March in Moscow. Talks focused on the elimination of impediments to the development of bilateral trade and economic relations; the facilitation of smoother implementation of assistance to Russia, and an active exchange of views regarding strengthening of economic ties with the Russian Far East. At the meeting in November, the two foreign ministers reached a unanimous understanding on holding meetings of the subcommittees under the Inter-Governmental Committee in late January 1997 and on convening the second session of the Committee in the first half of 1997.

5. Relations between Japan and Europe

Moves toward integration in Europe have further enhanced Europe's presence in the international community. With the establishment of a new framework for peace and prosperity after the end of the Cold War, the importance of close cooperation between Japan, Europe and the United States has grown; Japan and Europe are particularly aware of the need to enhance their relations further. In addition, Europe has begun to pay much closer attention to Asia in general, as evidenced by the very active stance, discussed below, that it has adopted toward the Asia-Europe Meeting (ASEM). Indeed, with the recognition of both sides of the considerable strengthening of Japan-Europe relations achieved in the autumn of 1996, that season could well be called the "European season" of Japanese diplomacy. During September, October and November, many important Europeans visited Japan, including British Foreign Secretary Malcolm Rifkind; the annual Japan-EU Summit (which brought Irish Prime Minister John Bruton and European Commission President Jacques Santer to Japan) was held; and Czech Premier Vlaclav Klaus, German Chancellor Helmut Kohl, French President Jacques Chirac (a State Guest), Swiss President Jean Pascal Delamuraz, King Albert of Belgium (a State Guest) and Prime Minister Willem Kok of the Netherlands visited Japan.

In addition to establishing Japan and Europe as global partners and strengthening bilateral relations, in the many Summit Meetings and foreign ministerial meetings with these important European counterparts, Prime Minister Hashimoto and Foreign Minister Ikeda emphasized that Japan and Europe must work together toward the resolution of a wide range of issues facing the international community. Of particular importance was the formulation of action plans (the U.K./Japan Action Agenda; France-Japan: 20 Actions for the Year 2000; and the Action Agenda for Germany-Japan Partnership) with Britain, France and Germany, which constitute the nucleus of Europe. Furthermore, France and Germany agreed in principle to hold annual Summit Talks, and Japan and Britain also agreed to hold Summit Talks in the future. In the Japan-EC Joint Declaration of 1991, Japan and the EU had already agreed in principle to hold Summit Talks annually. Now, the Summit Meeting framework has been expanded to include bilateral Summits with the principal European countries. Japan must build upon the framework it has established with the major European countries to further develop friendly and cooperative ties with other nations in a wide range of areas, including political, economic and cultural issues.

The nations of Central and Eastern Europe are generally making steady progress in their efforts to democratize and to make the shift to market economy, and Japan is continuing to support reform efforts there. As was affirmed with Czech Premier Vlaclav Klaus during his visit to Japan in September, the end of East-West confrontation has brought the possibility that not only Western Europe but also the nations of Central and Eastern Europe could well join Japan as partners with a common commitment to democracy and market economy.

Particularly noteworthy is the fact that the Council of Europe (CE), a 40-member organization of nations with a shared commitment to democracy and human rights, granted observer status to Japan, having earlier done the same for the United States and Canada. Also, Nobuo Matsunaga attended the Lisbon Summit of the Organisation for Security and Co-operation in Europe (OSCE) in December to represent Japan as a "Partner for Cooperation."

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