The Fourth Press Conference, 8 July 2008
- G8 Working Session on the world economy
- Questions concerning climate change
- Questions concerning international organizations
- Follow-up questions concerning climate change
- Question concerning the proposed discussion on G5 countries' oil consumption
- Questions concerning the expansion of the G8
- Questions concerning biofuels
- Question concerning the discussion on the recent oil price increases
- Follow-up questions concerning the expansion of the G8
- Question concerning US dollar exchange rates
- Question concerning possible diversity of views of Canada and the Russian Federation
I. G8 Working Session on the world economy
Press Secretary Kazuo Kodama: Good afternoon to you all. Thank you very much for attending my press briefing about this morning's G8 leaders' Working Session, which primarily focused on the world economy, including the rising price of oil, food, and some other primary products.
To begin with, let me tell you that the G8 Summit has an established rule with respect to the briefing, which is that I am not allowed to give you the affiliation of the speaker. I can certainly share with you what has been discussed, and what kinds of views were expressed by the leaders. However, please don't ask me who said what, or ask if the US president made a certain comment or not. Unfortunately I cannot answer that kind of question.
This morning's session started at 10:15 and ended at 12:05. Now I understand the G8 leaders are in the Working Lunch Session. In the morning session the themes of discussion were the evaluation of the current condition of the world economy and also the evaluation of the future prospects of the world economy, looking also at the current situation pertaining to inflation and the rising oil and food prices, and so on.
At the very beginning, as the G8 Chair, Prime Minister Fukuda proposed that at the end of the day he really would like to send out a strong message on the world economy, based on the following three points. Number one, while we see very strong inflationary pressure at the moment, we are indeed concerned about this inflationary pressure, including the rising prices of oil, food and other primary products. The future prospects for the world economy will be positive. Number two, if we compare the current situation with the situation at the time of last year's Heiligendamm Summit, we are confronted by new situations like the rise in oil and food prices. These current conditions do require the world economy to improve the rather tightened demand-supply situation. The current situations require us to improve the transparency of financial markets; also, in this regard, concrete measures should be taken. Number three, there is also a very strong need for us to fight against the growing tide of protectionism. In order to do so, we need to agree on even more liberalization as well as the strengthening of trade-related rules. For that purpose, we should do our best to seek a successful agreement of the World Trade Organization (WTO) Doha Round negotiations, which also should be balanced ones. Also, in that regard, we should send out a strong message to support the successful outcome of the WTO Ministerial Meeting, which will start on 21 July. With this, the floor was opened. I can share with you the flow of discussions on a couple of important items.
Before that, the responses of other leaders to what Prime Minister Fukuda mentioned. With respect to his assessment that the future prospects for the world economy remain positive, there seems to be a consensus on that. While they all admit, of course, that there still remains uncertainty - we note a slowing down of the world economy. There is a consensus view that there is a need for a financial market stabilization as well as a need to prevent protectionism on a global scale.
Then discussion went on, first on the Doha Round. The point was made that the Doha Round should be a balanced one, by which we mean a balance amongst the agenda items like agriculture, non-agriculture market access (NAMA), services or rules. Amongst these items a balanced sort of agreement should be sought after. Then also within the item of agriculture negotiation itself, we should also look at the balance amongst the issue of domestic support, the issue of export subsidies, the issue of market access, and also the balance between the exporting countries and the importing countries of agricultural produce. So much for the Doha Round.
Then, some leaders mentioned that the world economy indeed requires a global response from the G8 leaders, in view of the fact that we are dealing with issues that are all interrelated. In order to do so, it is necessary for us to seek more cooperation and coordination with emerging economies. We should have more dialogue with emerging economies; we should expect their constructive role in so doing.
Then some leaders also pointed out that in order to respond to these interrelated and difficult challenges, we should consider reexamining the functions and roles of existing international organizations, or the frameworks on which these organizations are structured. Some ideas were presented.
Then on some other items, returning to the forecasting of the world economy in the future, a few leaders shared their views on the economic conditions of their countries. Other leaders also mentioned that we are confronted with a nexus of interrelated issues, including the stability of the financial market, the foreign exchange market, primary products markets, inflation, and so on. So these issues require structural as well as a comprehensive approach. That kind of point was again made.
Now, on foreign exchange, I can tell you that there was not any substantive discussion on this issue at all. Rather, I will share with you just two points made by the participants. One is in order to manage the issue of foreign exchange, the matter must not only be discussed amongst the G8, but the G8 also seeks coordination and collaboration with emerging economies to deal with the issue of foreign exchange. One leader mentioned that, in a nutshell, a strong dollar is in the interest of my own country.
On the financial market, a point was made that we need to improve the transparency of the market itself. Also, we should improve risk management practice in the market. On the other hand, there were no references to the aftermath of the sub-prime loans.
Also, another point was made with respect to the role of the international organizations' economic forecasting: the early warning function of these organizations should be improved. That point was made by some leaders.
Now, on the issue of the oil market, with respect to the factors which have caused the rising oil prices, a couple of views were expressed. Some leaders mentioned that the fundamental reason for the rise in oil prices is that the demand is really bigger than the supply, so the very tight demand-supply conditions are the main source of this rising price of oil. Other leaders mentioned that there may be also other speculative money factors that are a part of the reason why oil prices have been so high recently. However, I have to add that there was no conclusion as such, no sort of consensus on why this phenomenon is taking place at the moment. These views were just expressed and shared.
Then a few leaders emphasized the importance of nuclear energy. There was no opposition to that view. A view was expressed that we should endeavor to decrease our dependence on oil and also a view was expressed that we should strengthen the dialogue between oil producers and consumers. Also, a view was expressed that we should further improve our energy efficiency and also we should diversify energy resources as well. Then some other leaders mentioned that we should also look at the domestic oil subsidies; that is also a problem. Then there was also the view that we should adopt a new energy charter, which would be acceptable to both oil producers and consumers alike. Then also some leader mentioned that we should also seek to establish a worldwide energy forum. So much for the oil market-related issue.
Then the G8 leaders went on to discuss trade and investment. Here, again, the leaders acknowledged that while globalization is progressing, in some quarters, on a global scale, there is a growing tide of protectionism. Therefore we should explain the merits of globalization to the people and thereby we should stem the growing tide of protectionism. This is a very important challenge at the moment.
In this respect, again, the WTO Doha Round is crucially important. We should endeavor to seek a successful agreement on the Doha Round negotiations. One leader mentioned that. But we have to succeed in agreeing the modality of this Doha Round negotiation; if not, the successful ending of the Doha Round itself will be very, very difficult.
On the sovereign wealth funds, just a few points were made. One is that we should improve the transparency of the activities of the sovereign wealth funds, and also the best practices should be established and shared. In this regard, the G8 leaders would hope that the International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development will continue to work on these issues.
Very briefly, the G8 leaders discussed the issue of food security. For your information, food security will be amply discussed in the afternoon, today, in relation to the agenda of African development. Anyway, a few points were made. One is Africa's agricultural protection will be a key in dealing with this issue of food security. On the issue of genetically-modified organisms, the discussion should be conducted based on the scientific knowledge and viewpoints.
On the issue of the development of biofuels, a point was made that the development and use of biofuels should be conducted in a sustainable manner.
A few more items. One leader mentioned that G8 now needs the cooperation of the non-G8 member countries. For the G8 to conduct discussions with non-G8 members will serve to bring about efficient, effective discussion on all these issues. It is also befitting for the 21st century type of G8 Summit. My interpretation is that this leader suggested that the G8 should be somehow expanded. In response, three leaders expressed their views on this suggestion. All in all, they said, number one, G8 is a group of countries that share basic fundamental values, and that significance should not be lost. Number two, when we enlarge the membership, including the number of participants, that will be most likely to dilute the quality of the discussion itself, what with time limitations and so on. Number three, in any case, including this G8 Summit at Hokkaido Toyako, we have continued the Heiligendamm Dialogue process with a group of five - South Africa, India, Brazil, China, and Mexico - tomorrow morning. And also we have introduced G8 Outreach Meetings, including yesterday's G8 plus African leaders, and also tomorrow's other G8 plus eight non-G8 members Outreach Meeting. There was no sort of decision being made but this is the essence of the discussion amongst the G8 leaders on this issue.
Then, finally, one leader mentioned that he would support Japan becoming a permanent member of the reformed United Nations Security Council. In response, some leader mentioned that in any case, this will require a consensus decision on the part of the UN members. I have to remind you that this was the discussion on the agenda item of the world economy. United Nations Security Council reform was just briefly mentioned.
Related Information (G8 Statement on World Economy)
II. Questions concerning climate change
Q: Was there any discussion of climate change? I heard that there were some very late night or early morning discussions on that. Could you talk a little bit about that?
Mr. Kodama: To the best of my knowledge, no, there was no discussion of climate change this morning.
Q: Any overnight discussions on that?
Mr. Kodama: Sorry, on this issue I am privy to what our sherpas worked on. I can imagine that they didn't sleep at all and tried to present a draft communiqué or paragraph to be discussed by our leaders right now during this Working Lunch.
Related Information (G8 Statement on Environment and Climate Change)
III. Questions concerning international organizations
Q: On the worldwide energy forum that you mentioned, was there a consensus that there needs to be such a body to take this forward? Also, you mentioned reform of international organizations. Was there discussion of fundamental reform of international bodies such as the IMF, World Bank, United Nations or whatever?
Mr. Kodama: On the latter question, I do not think there was any consensus agreement as such, but it was expressed that there is a need to look at the reform of international organizations.
As to your first question, there was not any sort of agreement as such. Such a view was expressed. I have just received updated information on the world economy: I understand there were a few revisions made on the discussions.
Related Information (G8 Statement on International Institutions)
IV. Follow-up questions concerning climate change
Q: To go back to this issue of climate change, we have seen that these media reports have been briefed by Japanese Government officials on the issue of climate change, so we would also like to hear about this.
Mr. Kodama: Let me respond to you as follows. The Japanese Government views climate change as one of the most important issues at this G8 Hokkaido Toyako Summit Meeting. Also Prime Minister Fukuda has taken quite a few - in my view - initiatives, right from early this year when he went to Davos. He set out basic principles that should be incorporated into a post-Kyoto Protocol framework, which of course concerns what we call the mid-term targets. Also he has emphasized all along the importance of the principle of inclusiveness. Not only the leading economies; also the developing countries should take part in this post-Kyoto Protocol framework. Finally, the leaders including Prime Minister Fukuda, would like to show at the end of the day that they have made progress from their agreement last year at Heiligendamm.
Q: This question is in relation to the comment by my colleague. Once again we saw a report where a Japanese Government official briefed Japanese journalists saying that there has been a consensus among the G8 leaders to agree on setting the target of halving the CO2 emissions by 2050 and a statement carrying that agreement is to be issued after the Working Lunch. Have there been such talks? Obviously there have been such talks and we would like to hear also what they actually talked about and whether there is such a consensus.
Mr. Kodama: I think I have to say, at this moment, I would rather seek your understanding to just wait for the outcome of this Working Lunch. Of course I hope that not only myself, but you will receive the final declaration on climate change.
V. Question concerning the proposed discussion on G5 countries' oil consumption
Q: Chancellor Angela Merkel was quoted yesterday saying that there needs to be discussion with the G5 countries about their consumption of oil. What is on the table for that? Is it just some suggestion that they should increase their oil efficiency? Or do you have any idea of what is in mind?
Mr. Kodama: I really cannot identify who said what. However, I mentioned the salient points made by our leaders on the issue of the crude oil market.
Sorry, you were asking about tomorrow morning's Heiligendamm process?
Q: What proposal are the G8 leaders going to make to the G5 in terms of their contribution to cutting back on oil use?
Mr. Kodama: I think the summit tomorrow morning when the G8 leaders will meet with the G5 leaders - they will share their views based on today's discussion in the morning. So again, we have here their declaration so certainly they will emphasize the points made in this declaration. Starting from paragraph 11 until paragraph 12, the energy security is most related.
VI. Questions concerning the expansion of the G8
Q: You have mentioned three points that leaders have expressed their views on concerning not to enlarge the G8 structure. So what were the points that supporters of the G8 expansion made?
Mr. Kodama: You mean the focus?
Q: The expansion of the G8.
Mr. Kodama: I do not have any more information on the contents of this discussion. The points which I shared with you earlier are the very essence; no more than that.
Q: You don't have any information about those conversations, but do you know if tomorrow, when they meet with the G5, they are going to talk about this possible enlargement with the leaders of the G5?
Mr. Kodama: I cannot really tell you what will be discussed. Again the leaders will be free to exchange their ideas. On the other hand, I understand that the Heiligendamm process does have its own sort of agenda items. My understanding is that this dialogue process certainly will discuss issues like development, innovation, intellectual property, investment and energy efficiency; these will be the major points to be discussed.
VII. Question concerning biofuels
Q: You made a reference to a brief comment by one of the leaders on biofuels. Correct me if I am wrong, but I cannot see any reference to that in the document. Is that it as far as biofuels are concerned? Is there any more discussion on that matter?
Mr. Kodama: My understanding is that biofuels will be amply dealt with when they discuss Africa and development including the issue of food security. My understanding is that there will be a separate document on food security.
Q: Just a sort of procedural thing, can we take it there will be a document issued today on climate change because there were some rumors that it might be held over until tomorrow and the Major Economies Meeting and the G8 document on climate change would come out at the same time.
Mr. Kodama: I think the answer will be given by the leaders themselves. Again and again, I have to emphasize that they are right now discussing the issue of climate change. Then if they agree on the final sort of wording I am sure they will decide when to disclose it to the public. So I don't think I can tell you anything more than that.
VIII. Question concerning the discussion on the recent oil price increases
Q: You mentioned that there was no consensus on the reasons why oil prices are so high. Could you elaborate a little bit? And do I understand correctly that there was no consensus as to what should be done about oil prices?
Mr. Kodama: Maybe my characterization of there was no consensus on why the oil price hike happened was a bit misleading; I am sorry about that. Various views were expressed why the oil price hike is happening right now, for some time, and my point is such that amongst the various factors that were mentioned by the leaders, there was no such sort of discussions or agreement that factor "A" is the number one reason why this is happening and factor "B" is number two, etc. There was not any such kind of discussion on that, so if you just take it as such. Definitely, the likely measures to be taken or recommended by the leaders will certainly be looked into from now on based on this declaration.
IX. Follow-up questions concerning the expansion of the G8
Q: Do you have an idea how much time was spent discussing the possible expansion of the G8?
Mr. Kodama: I have no idea but I don't think the G8 leaders spent a lot of time discussing this.
Q: As for the G8 enlargement, you just now said there were three countries who opposed the ideas. Could you tell us how many countries were in favor of the idea?
Mr. Kodama: According to my debriefing, just one country's leader expressed his idea on the enlargement and then three leaders responded, as I explained to you. So that is the situation on this issue.
X. Question concerning US dollar exchange rates
Q: Besides the statement by the Russian president that he supports the strong dollar, was there any mention that the reason behind the high oil price is the weak dollar? Did they touch upon this issue and was there any demand that the US should try to adopt policies to strengthen its currency?
Mr. Kodama: I think I gave my answer to such a question. There weren't any substantive discussions on the exchange rate as such. I don't think there was any discussion about what you just mentioned.
XI. Question concerning possible diversity of views of Canada and the Russian Federation
Q: I just had a question about energy and the discussion of oil. There are two oil-producing nations in the G8. What was the diversity of opinions between the oil-producing nations and the oil-consuming nations at that table, and were there different views expressed by the producers?
Mr. Kodama: I am sure you must be interested in knowing the answer to that question, but I am sorry I cannot give you any more detail.
Back to Index