On-the-Record Briefing 13 November 1998

Speakers : Ms. Mikie Kiyoi
(Spokesperson for Minister for Foreign Affairs Masahiko Koumura)
Date : November 13, 1998
Time : 21:07 to 21:51
Location : Cinta Alam #11/12, Level 3M, Mines IMC
Kuala Lumpur, Malaysia
Attendants : Approximately 30
  1. Introduction of the Spokesperson
  2. Senior Officials Meeting
  3. Bilateral talks
  4. Early voluntary sectoral liberalization (EVSL)
  5. Negotiations on early voluntary sectoral liberalization
  6. Measures to cope with the Asian financial crisis
  7. Outcome of negotiations on early voluntary sectoral liberalization
  8. Perceptions of linkage between EVSL and the Miyazawa Initiative
  9. Shape and time frame of the Miyazawa Initiative
  10. Funding for the Miyazawa Initiative
  11. Domestic reception of the Miyazawa Initiative

  1. Introduction of the Spokesperson

    Official of the International Press Division of the Ministry of Foreign Affairs: Good evening, ladies and gentlemen. We are now going to start our on-the-record press conference by the Japanese Delegation. Today's briefer is Ms. Mikie Kiyoi, Spokesperson for the Foreign Minister of Japan. Ms. Kiyoi, please.

    Ms. Mikie Kiyoi, Spokesperson for Minister for Foreign Affairs Masahiko Koumura: Ladies and gentlemen, good evening. Thank you very much for coming, despite this relatively late timing. Minister for Foreign Affairs Masahiko Koumura arrived at Kuala Lumpur yesterday around 7:30 in the evening. I was told that there was some interesting news, in that contact with his plane was temporarily lost. But he arrived in Kuala Lumpur safely, without any difficulties, so he is looking forward to participating actively in the Ministerial Meetings, which will start tomorrow.

  2. Senior Officials Meeting

    A: As you may know, the Senior Officials Meeting was held today, and it was decided that the EVSL will be substantively discussed at the Ministerial level. That is the Senior Officials Meeting outcome.

  3. Bilateral talks

    A: As far as Foreign Minister Koumura is concerned, he had active bilateral consultations with his counterparts in other member economies, such as Viet Nam, Thailand, the Philippines and Singapore, and I was told that he had a meeting with his Canadian counterpart. I don't know the final result, but outside the framework of APEC, the Australian minister organized a dinner meeting today, and Foreign Minister Koumura was invited to that. To my knowledge, he accepted that invitation. That was the agenda of Foreign Minister Koumura's day here in Kuala Lumpur. With his meetings with his counterparts, there was a general consensus with his counterparts whom he met today. I only know up to the Philippines' minister: Viet Nam, Thailand and the Philippines. I did not attend the Canadian meeting and the Malaysian meeting, so I cannot say anything about these meetings. But during his meeting with his counterparts from Viet Nam, the Philippines and Thailand, there was a general agreement that the most urgent and needed result of this year's APEC Meeting is to show a sort of solidarity on how to pull this region out of the current crisis. That is the most urgent and needed outcome throughout the APEC Ministerial Meeting, and subsequently the Leaders Meeting. This general agreement is quite pertinent, as the Asian financial crisis is already more than one year old. Last year in Vancouver, the seriousness of the crisis was already one of the major issues among the member economies, so after the Vancouver meeting, in Kuala Lumpur, the member economies should focus on this financial crisis and its early end.

  4. Early voluntary sectoral liberalization (EVSL)

    A: Perhaps many of you are quite interested in two overly magnified sectors-- the forestry and fisheries sectors -- under the early voluntary sectoral liberalization process. Japan's stance has always been clear. I hope that my colleague has already circulated the Vancouver document, which clearly sets out the principle of voluntarism in APEC. Japan agreed to participate in this process in accordance with the principle of voluntarism. There is no ambiguity about the term of voluntarism. So Japan has already announced that after the tariff reduction under the Uruguay Round in products in these two sectors, we are not in a position to take further measures in the tarif area and the non-tariff area. Nonetheless, we are fully participating in 25 other measures. There are nine sectors identified in Vancouver, including forestry and fisheries products, and these nine sectors contain three measures: one is tariff and non-tariff measures; the second measure is trade facilitation; and the third segment is economic and technical cooperation. So these three segments multiplied by nine sectors mean 27 measures. And Japan announced that it would participate fully in 25 measures out of 27.

    I don't know why many media conveniently forget this very fact: that Japan is the world's largest net importer of forestry products, and largest net importer of fisheries products as well. 80% of Japanese consumption in the forestry sector is imported products, and 40% of products in the fisheries sector is also imported. The forestry sector's trade-weighted tariff rate in Japan is 1.7%, which is very low compared with most of the other member economies of APEC.

    So these sectors are already a very politically sensitive matter in Japan; nevertheless, Japan has already announced formally that Japan will discuss these sectors also, within the WTO talks which will start in the year 2000. If some member economies consider that disagreement in these two sectors--or, I should say, these two measures out of 27 measures -- result in a failure of APEC, that is already a problem with the definition of the word "failure." APEC started as a regional forum where voluntarism and flexibility are respected, and its nature is clearly different from that of the WTO, which is truly a negotiating setting. So from that viewpoint, some member economies which are pointing a finger at Japan, and because of the two measures which Japan is resisting out of 27 are saying that the APEC process is a failure, are overly magnifying a minor aspect of the whole APEC process and objectives. And I have said that in light of today's economic situation in this region, the most urgent and badly needed message which the APEC Meeting should deliver after the Leaders Meeting is to show that we are coping with resolving this financial crisis.

    That is all that I wanted to say at the outset, and I am delighted to answer your questions.

    Official of the International Press Division of the Ministry of Foreign Affairs: Any questions? Please kindly state your name and affiliation for the record. Go ahead, please.

  5. Negotiations on early voluntary sectoral liberalization

    Q: I am wondering if the Japanese side has indicated at all in any of the meetings that they might be willing to compromise in some way on forestry and fisheries? Specifically, one delegate mentioned that maybe within those sectors, Japan would be willing to drop tariffs on some kinds of products, even some key products, as a sort of compromise. What is your comment?

    A: I am totally unaware of that kind of a position. To my knowledge, among the Japanese Government participants in the Japanese Delegation here in Kuala Lumpur, I've never heard that story.

    Q: So you've never heard that they would be willing to drop tariffs on certain products within the sectors?

    A: "Drop" means exclude? Or drop the tariffs, you mean? As I said, Japan has already dropped tariffs under the Uruguay Round, and it is such a politically sensitive sector of products. Therefore, we are not in a position to take tariff measures and non-tariff measures under the framework of the APEC Meeting. But as I've said before, we are going to include these sectors in the WTO discussions, which will start in the year 2000.

  6. Measures to cope with the Asian financial crisis

    Q: You said the Asian crisis is the most important thing being discussed here. Does Japan have any fresh initiatives, above and beyond the so-called "Miyazawa Plan," to help the region? And also, have you got any more details on the so-called "Miyazawa Plan?" Because the Japanese Government to date has provided very sketchy details about this.

    A: A fresh proposal, no. When Japan has announced several economic stimulus packages to reflate Japan's own economy, many Westerners have complained, "We are already package fatigued." And I think the Miyazawa Initiative, which amounts to US$30 billion, is a substantially important figure. So if you expect something in addition to this US$30 billion and the already implemented US$44 billion of Japanese assistance to Asian countries in trouble, I think it's too much. As you know, the Japanese economy is in trouble, and it is not always so easy to persuade taxpayers to provide assistance to other countries, especially when there are many people who are in trouble back home.

    You said that the Miyazawa Initiative is so far a sketchy idea. Yes, it's true. We have already sent a mission to Thailand and Indonesia recently to find out their specific needs which meet the criteria of the Miyazawa Initiative, and we are going to send another mission to seriously affected Asian countries to find out their specific needs. We do need to understand the real and urgent needs in order to use this US$30 billion contribution in an efficient and effective way. That is the only way to persuade our taxpayers. Japanese taxpayers would be very happy to know that this huge contribution was being used effectively to help restore the neighboring Asian countries. And the neighboring Asian countries' economic revitalization would be a benefit for Japan as well.

    As to the pillars of the Miyazawa Initiative, there are four points to tell you. It's still sketchy, as the details and fleshed-out measures will be formulated after substantive discussions with prospective recipient countries, with this initiative. Number one of these four pillars is to help the restructuring of debt problems of private companies, and the stabilization and revitalization of the financial system. The second point of this initiative is reinforcing the social safety net for socially handicapped people. The third point is an economic stimulus, especially to create more jobs in the countries in trouble. And number four is to cope with the so-called "credit crunch" or "credit contraction," which can be seen in Japan as well. There is one specific measure regarding the bonds to be issued by recipient countries. The money from the Miyazawa Initiative will be used to guarantee sovereign bonds to be issued by the countries in trouble in Asia. So a bond-related measure is already included in this initiative, which was announced more than one month ago. And let me say that this initiative was announced completely independently from this very small, minor EVSL issue.

  7. Outcome of negotiations on early voluntary sectoral liberalization

    Q: From your perspective, has any progress been made in the past couple of days on those two outstanding issues, and is Japan particularly concerned that by the end of the Economic Leaders Meeting, they might walk away without the complete outcome that originally was hoped for at the beginning of this conference?

    A: We are expecting that we will reach a consensus, that the member economies will show flexibility and respect the principle of voluntarism. So Japan does not expect that the Japanese Delegation will walk out, unless it is forced to do that.

    Q: Just to follow up that question, what is the response to the comment that actually it was Japan that was holding back the progress on the negotiations over EVSL? Because what the senior officials have been doing the last two days is to reach a credible package.

    A: This is not the first time for Japan to be blamed. I don't know why many of the foreign media conveniently overlook Japan's initiative to help out the Asian countries for more than one year. Much about the leadership demonstrated by the Japanese Government is neglected by the foreign media. So this is not the first time that some member economies are pointing a finger at Japan. If some member economies are playing up the disagreement on this minor issue, it is quite dangerous in light of the nature of APEC, which is a flexible and voluntary forum consisting of member economies whose background is so diverse. As I said before, if a failure is defined by some member economies in their own way, despite the clear statement of the Vancouver Meeting's documents -- "This is a failure, this is a failure" -- then that kind of attitude is somewhat irresponsible. I wonder whether there is any member economy which objects to the point which I said, which is that the most urgent and needed message to be delivered by this APEC Meeting is to cope with the current financial crisis, not disproportionately magnifying two minor sectors. Again, Japan is the biggest net importer of products in these two sectors, and its tariff rate is substantially lower.

  8. Perceptions of linkage between EVSL and the Miyazawa Initiative

    Q: You said the Miyazawa Plan was announced independently from the EVSL issue. Well, there seems to be an impression among the Asian countries that it is not completely unconditional, and that they are expected to voice some support or understanding for Japan to actually get the money. Would you say that the Miyazawa Plan is still going to be announced, regardless of what kind of pressure Japan is going to meet in the Ministerial Meeting or the Leaders Meeting?

    A: This Miyazawa Initiative, as I said, was announced more than one month ago. This initiative was designed and initiated by an entirely different agency from the one concerned with the EVSL negotiations. The two are not linked. Japan has always been generous to other countries. Our country's assistance to other countries is rather famous for its unconditionality. Some countries complain about this generosity or unconditionality. If you, as a person, give some gift to your friend only if you get something in exchange for your gift, please do not ascribe that kind of behavior to other people --you know what I mean?

    Q: So the Miyazawa Plan will definitely go through?

    A: As I said, in light of the urgent, specific, clear needs of prospective recipient countries, the amount of money needed for such-and-such a country would be decided after examining closely the real needs of the respective recipient countries. So as long as there is a need on the side of these prospective recipient countries, the plan will go ahead.

  9. Shape and time frame of the Miyazawa Initiative

    Q: You just mentioned that the results for the package are not yet finalized, but is there a general breakdown at this moment of how many percent is going to which recipient country, and what exactly are the specific recipient countries' needs?

    A: Initially, we have in mind five specific countries which are the most seriously affected by this crisis: Korea, Thailand, Indonesia, the Philippines and Malaysia. This does not exclude the possibility of other countrieswhich are also seriously affected by the crisis.

    Q: Does that include Russia, or the possibility of it?

    A: I think Russia's financial crisis -- well, it's a good question. We are rather open, but it all depends on whether Russia's needs meet the criteria of the Miyazawa Initiative which I stated before. So if the nature of the crisis and the needs are substantially different from the criteria under the Miyazawa Initiative, then Russia will be excluded. But we need a close-up examination. As you know, Prime Minister Keizo Obuchi is now in Moscow, and without this Miyazawa Initiative, Japan has already been helping Russia out a lot. You may know that US$1.5 billion in untied loans is being provided to Russia under the Ex-Im Bank of Japan.

    Q: For the five countries you mentioned, have you committed yourself to each one of them, and how soon will they receive it?

    A: Let me repeat the same point. That all depends on the real and urgent needs which have to meet the criteria of the Miyazawa Initiative. This Miyazawa scheme will tackle some specific problems in these countries. So without knowing the specific needs, we can't say that these five countries will definitely get some portion of the Miyazawa Initiative in a specific amount. I can't say.

    Q: Are you able to say how much each of these five accounts for?

    A: Please let me repeat the same thing. I do not want to repeat the same point.

    Q: Could you please enlighten us on what is implied by "needs?" Because the more money the better, you know? What are your criteria?

    A: As I said, if one country desperately needs restructuring of the debt of private companies -- that is the first point that I stated under this initiative -- then all the debt amount will be scrutinized: how serious is the debt repayment program, etc.?

    Q: Can we have a time frame for the implementation? In view of the statement that you made, that there is an urgent situation affecting the Asian countries in the financial crisis, it so happens you have a sort of maximum. Do you think, with regard to the actual needs of these recipient countries, is it possible that you will increase the minimum, if you find that actual needs exceed the initial package? Also, can you also tell us the time frame in light of the urgency of the matter?

    A: Let me repeat that US$30 billion is a huge amount, and without using one single dollar yet, I can't say that that amount will be increased. As to the time frame, it is clear that this financial crisis should be tackled as soon as possible to avoid any snowball effects. So the time frame should be very short; that's all I can say.

    Q: How short?

    A: I can't say. It's an interesting question. When my Prime Minister, Mr. Obuchi, went to New York in September, he had a time frame related question at his press conference: within what time frame the Japanese Banking Sector Revitalizing Bill would be passed in the Parliament? That was a question from one journalist. Mr. Obuchi's reply was that Japan is a democratic country; therefore we need a compromise, including the opposition party. That was 22 September, and within roughly one month, the bill passed. But let me say that the U.S. Government's contribution to the IMF, which was so badly needed since the start of the Asian financial crisis, was approved only recently. And let me say that that amount was $18 billion, which is substantially smaller than the $30 billion which the Miyazawa Initiative is intended to provide. Please recall that compared with that time frame for Congressional approval, I think Mr. Obuchi's government worked very hard, and within one month he passed the bills which he promised in September.

  10. Funding for the Miyazawa Initiative

    Q: Can you tell us how the money will be raised by Japan? I mean, won't Japan issue bonds themselves to raise this money? Also, you say you're still considering the criteria for the five countries. Does that suggest that the Japanese Government thinks perhaps some of these countries might not be worthy of this money, might not meet the criteria at this point?

    A: It is a joint operation, as are many projects to be implemented by two countries. Perhaps Japan is the financial provider and -- well, it's better to take the example of the World Bank's loans. The World Bank is willing to provide such-and-such an amount of money to formulate such-and-such a project, but if the recipient country cannot take part in their responsibilities, theneven though the World Bank has the good intention to lend money to such-and-such a borrowing country, the project will not be formulated. So it is a joint operation. Japan is ready to provide assistance, so recipient countries should also meet the criteria, as you said, with some actions to be done by the recipient countries also.

    Q: And in terms of Japan raising the money? Will Japan issue bonds to raise the $30 billion? Is it new money?

    A: No, it's not bonds. There will also be new money. I can't preempt the results of next Monday's economic stimulus package, but I hope that the financial contribution to be used for this Miyazawa Initiative will also be included in the next package. There is already money allocated to this Miyazawa Initiative. So I don't think there is any problem for Japan to raise this US$30 billion.Official of the International Press Division of the Ministry of Foreign Affairs: May I have the last question, here?

  11. Domestic reception of the Miyazawa Initiative

    Q: Are you facing any domestic objection to the Miyazawa Initiative? It is a very substantial initiative, as you mentioned. So what is the domestic sense, given that Japan's economy itself is facing some difficulties?

    A: It's a very good question. As I said, Japanese taxpayers will be more than happy if their contribution is efficiently and effectively used to really help out these Asian countries. But I should say that Japanese people are also suffering from the current crisis. Still, the Japanese economy is deeply integrated in this region, and helping these countries in the region will also be a beneficial goal for Japan itself. As a responsible neighboring country, the people and the taxpayers of the responsible country are glad to say that so far, there is no major objection. I am very proud to be able to say that. Thank you.

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