Section 1. Promotion of Relations with Other Countries




I. Asia



1. Asian Overview



As neighbors who should share peace and prosperity, Japan and the other nations of Asia have especially inter-dependent relations. Based on this understanding, Japan's basic policy aims at working toward closer relations and better understanding with these Asian countries, and making contributions to the stability and development of this region.

Asian events in 1976 included the deaths of Chou En-lai and Mao Tse-tung followed by the establishment of the Hua Kuo-feng Government in China, continued tension on the Korean Peninsula as symbolized by the Panmunjom incident, and the attempts at a new relationship between the ASEAN member states and the nations of Indochina. Despite these events of considerably instable nature, confrontation was avoided all in all and there were visible moves in search of stability.

Furthermore ASEAN an association for regional cooperation in Southeast Asia, held its first summit meeting and there was progress in its regional cooperation for strengthening resilience both of the individual member states and of the region as a whole.

Taking these developments in the situation into consideration, Japan has endeavored to strengthen relations with the nations of Asia and to develop those with ASEAN as a cooperative regional organization. Japan's major diplomatic efforts made mainly in 1976 were as noted below.



2. Korean Peninsula



(1) The peace and stability of the Korean Peninsula is closely related to the peace and development not only of Japan but of all East Asia. Unfortunately, however, as revealed by the occurrence of the Panmunjom incident in August, confrontation and tension between North and South still continued on the Korean Peninsula in 1976. It is strongly desired that both North and South resume substantive dialogue toward peaceful reunification so that relaxation of tensions there be brought about.


(2) In promoting diplomatic activities toward the region, Japan has been rendering special consideration not to disrupt the delicate balance sustaining peace on the Peninsula. In this context, the maintenance and furtherance of friendly and cooperative relations with the Republic of Korea is the basic objective of Japan's policy toward the Korean Peninsula. As to relations with North Korea, Japan intends to build up interflow of trade, cultural, personal, and other exchanges with North Korea.


(3) Visits to Japan of eminent figures of the R.O.K., the Exhibition of Korean Fine Arts of Five Thousand Years, and other developments in 1976 further deepened friendly relations between Japan and the R.O.K. In addition, there has been a delightful event for Japan-R.O.K. relations from the broad humanitarian perspective in that the R.O.K. Government suspended the execution of punishment of three Japanese citizens sentenced to life imprisonment for having violated the Anti-Communist Law and other laws and released them to return to Japan in late December.


(4) Japan-R.O.K. trade showed renewed vitality in 1976 after having slipped slightly in 1975, two-way trade expanding to approximately $4.7 billion (up 33.3%); yet Japanese private investment in Korea continued to be sluggish as in the previous year. In November, the 13th regular Japan-R.O.K. Trade Conference was held in Seoul. Government-level economic cooperation and technical cooperation comprising acceptance of Korean trainees and dispatch of Japanese experts also continued as usual. In March, notes were exchanged for grant aid, the major part of which was the provision of \1.0 billion worth of laboratory equipment as the third-year installment with the College of Engineering, Seoul National University. In November, notes were exchanged to provide yen loans of some \10.9 billion for the expansion of a telecommunication facilities project and the double-tracking of the Chungbug Railway Line project.


(5) Although Japan does not have diplomatic relations with North Korea, there has been substantial expansion in its trade, personal, cultural, and other exchanges with North Korea in recent years. However, 1976 two-way trade was only about $170 million, down from the 1975 figure in reflection of the deterioration in North Korea's foreign exchange position. An agreement was reached in negotiations between North Korea and the Japanese firms concerned for rescheduling of North Korean debts.



3. China



Steady progress has been made in Japan-China relations in general in the past several years since normalization. In view of the fact that it is of especially great significance that Japan and China stand in friendly and good-neighborly relations for the maintenance of peaceful international relations in Asia, Japan is making efforts to further consolidate the friendly and good-neighborly ties between the two countries on the basis of the Japan-China Joint Communique issued in September 1972.


(1) With regard to the implementation of the Working Agreements, a meeting of the Japan-China Joint Fisheries Committee was held in Peking in June 1976 upon the Agreement on Fisheries for an exchange of views on the implementation of the Agreement and other related matters. Notes were exchanged in Tokyo in August 1976 in regard to setting up of private shipping organizations and respective representative liaison offices in both countries as one of the means of materializing shipping business between the two countries.


(2) Regarding a treaty of peace and friendship between Japan and China, negotiations were conducted since November 1974 in both Tokyo and Peking. The first meeting at the Foreign Minister level was held in New York in September 1975. This was followed by a meeting for an exchange of views between Foreign Minister Kosaka and Chinese Foreign Minister Ch'iao Kuan-hua again in New York in October 1976.


(3) In economic relations, the total amount of trade between Japan and China in 1976 was US$3.03 billion, a decrease of 19.8% over the previous year. This decline may be attributable to the domestic political situation and natural disasters in China as well as the impact of economic recession in Japan. However, the number of economic missions both ways, with an increase over the 1975 figure, was 124. It is also noted that China took part in the Osaka International Trade Fair in April for the first time.


(4) In addition to these developments, Japan and China have observed active personal and cultural exchanges between the two countries. An Ancient Chinese Bronze Exhibition and a Lu Hsün Exhibition were held in Japan in March and October 1976, respectively. The Japan-China submarine cable was also completed and opened for service in October 1976.



4. Mongolia



Relations with Mongolia have been progressing fairly smoothly ever since the establishment of diplomatic relations in February of 1972. In 1976 various cultural exchanges were implemented one after another on the basis of the Cultural Agreement. In February 1977 members of the Mongolian Great People's Khural visited Japan, and in March the long-pending Agreement on Economic Cooperation between Japan and the Mongolian People's Republic was signed in Ulan Bator.



5. Five ASEAN Nations and Burma



In 1976, the five ASEAN nations and Burma continued their efforts to strengthen their political, economic, and social foundations, meeting their respective difficulties. In February 1976, ASEAN held its first summit conference since its inception.

Japan has supported the basic policies of these countries and endeavored to build stable relations of mutual trust with them through wide-ranging discussions and exchanges of various kinds, while promoting further economic and technical cooperation.



(1) Official Visits


In January 1976, Foreign Minister Miyazawa visited Malaysia as the special envoy of the Japanese Government to attend the funeral services for Malaysia's late Prime Minister Razak. Among the dignitaries from Southeast Asian nations visiting Japan in 1976 to meet with Japanese leaders and to exchange views on the international situation and discuss cooperation on a bilateral basis were Philippine Foreign Secretary Romulo in September, Indonesian State Minister for Economic, Financial, and Industrial Affairs Widjojo in October, Burmese Deputy Premier U Lwin in November, Malaysian Foreign Minister Rithauddeen in November, and Indonesian Foreign Minister Malik in December.



(2) Promoting Economic Cooperation


Supporting these nations' self-help efforts for economic development and an improved standard of living, Japan continued in 1976 its active efforts in the field of economic cooperation. At the meeting of the Burmese Aid Consortium in Tokyo in November, for example, Japan's positive posture contributed greatly to the success of the meeting. Japan also demonstrated a positive policy at the conference of the International Governmental Group on Indonesia (IGGI) held in June. Furthermore, Japan made a commitment to extend to the Philippines commodity loans amounting to \5 billion. For the purpose of promoting mutual understanding between Japan and the ASEAN countries, a study mission composed mainly of representatives of Japan's private economic sector was dispatched to the ASEAN countries in April for an exchange of views with ASEAN economic leaders. Japan also hosted in July the 8th Meeting of the Japan-Thailand Joint Committee on Trade in Tokyo.



(3) Promoting Dialogue


Among the many endeavors undertaken in line with Japanese efforts to place its relations with the nations of Southeast Asia on a broader and stabler basis not restricted to the economic field are the Japanese-Indonesian Conference (a forum for exchange of views among leading figures in various fields of the both countries), gatherings for Southeast Asian students who have studied in Japan, the Youth Ship to Southeast Asia, and invitations to middle-ranking leaders to visit Japan.



6. Indochina



It is the policy of Japan to deepen contacts with all nations of the world, irrespective of differences in political and social systems, and from this standpoint the following are the major diplomatic efforts Japan made, including the economic cooperation with Vietnam and Laos and the restoration of diplomatic relations with Cambodia.



(1) Vietnam


On July 3, upon knowledge of the founding of the Socialist Republic of Vietnam following the reunification of North and South Vietnam on July 2, 1976, the Prime Minister and Foreign Minister sent congratulatory messages to Vietnam's Premier and Foreign Minister respectively, expressing Japan's wish to maintain and further develop friendly relations with united Vietnam.

In regard to economic cooperation, Japan concluded an agreement on September 14, with a view to extending appropriate cooperation for the postwar reconstruction and development of Indochina by contributing \5 billion grant aid to the Socialist Republic of Vietnam after the reunification in addition to the \8.5 billion grant aid which had been given to the former Democratic Republic of Vietnam (North Vietnam) in 1975. This grant will be used by Vietnam to purchase from Japan various equipment and materials necessary for the construction of a cement plant to contribute to the reconstruction and development of the Socialist Republic of Vietnam.



(2) Laos


The Lao People's Democratic Republic was founded in December 1975. It is the policy of Japan to maintain and develop existing traditionally friendly relations with Laos, and from this standpoint Japan extended an additional loan of more than \2 billion in April 1976 for the second-stage construction of the Nam Ngum Dam and grant aid of \300 million in December for the purchase of road construction equipment. The Japanese cooperation is highly appreciated by the new Laotian Government.



(3) Cambodia


Following Japan's recognition of the new Cambodian Government in April 1975 and Cambodia's subsequent expression in September of gratitude for the recognition of the Government, Japan restored diplomatic relations with Cambodia on August 2, 1976. In September 1976, Cambodian Deputy Prime Minister in charge of Foreign Affairs Ieng Sary paid an unofficial visit to Japan and met with Foreign Minister Miyazawa to discuss future relations between the two nations.



7. Southwest Asia



The Indian sub-continent and the Indian Ocean region are composed of developing countries which are major forces of the non-aligned movement. This is also the region where interests of the United States, China, and the Soviet Union are inextricably intertwined, making it an important region worthy of close observation in international politics.

 Japan's basic policy toward this area is to promote mutual understanding and cooperate to the greatest extent possible for the stability and development of the area. Under this policy, Japan made the following major diplomatic efforts:



(1) Regular Consultations (Working-level)


The Fourth Japan-Pakistan Consultative Meeting was held in Tokyo in August 1976 and the 11th Japan-India Consultative Meeting was held in New Delhi in December 1976, both to have frank exchanges of views on the international situation and bilateral relations.



(2) Official Visits


Sri Lanka Prime Minister Bandaranaike paid an official visit to Japan as a state guest in November 1976. In the same year Maldives Vice President Hilmy and Nepalese Finance Minister Thapa visited Japan in May and December respectively. These visits contributed to the promotion of mutual understanding between Japan and the nations of Southwest Asia.



(3) Economic Relations


In addition to sending a Japanese Government Economic Mission to Pakistan in March to seek ways of developing Japan-Pakistan economic relations, Japan sent an import promotion mission to Pakistan, Nepal, and Sri Lanka from February to March and to Bangladesh in March 1977 to help rectify Japan's lopsided trade with these nations.



(4) Economic and Technical Cooperation


In the field of economic cooperation, Japan promised to extend yen loans amounting to approximately \105.1 billion, grant aid amounting to approximately \3.5 billion, and KR food aid amounting to approximately $15 million (approximately \4.7 billion) to the countries of Southwest Asia in the period from January 1976 to March 1977. In the field of technical cooperation, Japan received 296 new trainees from the countries of Southwest Asia and 119 experts and 44 members of the Japan Overseas Cooperation Volunteers were sent to the countries of Southwest Asia in the fiscal year 1976. Furthermore, Japan sent a variety of study teams among which were the Agricultural Cooperation Project Development Survey Team, Project Finding Team for Mineral Industry and Power, Mission on Grant Aid for the Increase of Food Production, and Economic Cooperation Study Team.



II. Oceania



(1) In addition to Australia, New Zealand, and Papua New Guinea, Oceania includes such island countries as Fiji, Western Samoa, Tonga, and Nauru, as well as other non-independent territories, such as the Solomon Islands, the Gilbert Islands, and so forth.


(2) Like Japan, Australia and New Zealand are developed democracies located in the Asia-Pacific region, and they have maintained and developed close political and economic relations with Japan on the basis of economic complementarity. Fully aware that cooperation with developed democracies, including Australia and New Zealand, is of fundamental importance to maintaining stability and promoting prosperity in the Asia-Pacific region, Japan intends to redouble its efforts to develop close relations of lasting friendship and cooperation with these countries. In 1976 the following activities were observed.

Concerning Japan-Australia relations, Prime Minister Fraser paid an official visit to Japan in June 1976, when the Basic Treaty of Friendship and Cooperation was signed to further strengthen and expand relations between the two countries, not only in the economic field but in such wide-ranging fields as political, cultural, educational, and social fields. This is an epochal treaty of great significance laying the foundations for the long-term development of Japan-Australia relations. The Cultural Agreement between Japan and Australia went into force in February 1977 and in April the Australian Government established the Japan Foundation to promote exchange between the two nations.

The fourth meeting of the Japan-Australia Ministerial Committee took place in Tokyo in January 1977 and frank views were exchanged on economic relations - which form the core of the Japan-Australia relationship - particularly in the fields of trade in agricultural products and mineral resources, fisheries, industrial relations, and transportation.

Close contacts on the Governmental basis were also maintained with New Zealand, including a visit to Japan by Prime Minister Muldoon in April 1976. Views were frequently exchanged with respect to exports to Japan of agricultural, forestry, livestock, and dairy products of New Zealand, and thus mutual understanding on each other's domestic situations was deepened.


(3) Papua New Guinea, which obtained independence in September 1975, is located at an important crossroads between Southeast Asia and the South Pacific. With a view to contributing to the stability and development of Papua New Guinea, Japan has been promoting economic cooperation with it, among others, in the fields of forestry and fishery.

The other developing countries in the South Pacific, such as Fiji and Western Samoa, have recently become more active in promoting economic and social development. With regard to recent developments in the maritime order, these nations have shown strong interest in controlling and developing their local marine resources through the South Pacific Forum, which is an organization for regional cooperation. Complying with their self-help efforts for economic and social development, Japan is determined to enhance economic cooperation, and thus develop relations of friendship and cooperation with these nations.



III. North America



1. United States of America



As two leading industrialized democracies sharing both democracy and free market economies, Japan and the United States have close political, economic, cultural, educational, scientific, and other relations encompassing the entire spectrum of human activities. Indeed, friendly and cooperative relations with the United States form the cornerstone of Japan's foreign policy.

Cooperation between Japan and the U.S. as two of the leading industrialized democracies is also of increasing significance as international interdependence increases throughout the world. It is therefore hoped that Japan and the U.S. can work together on such problems as promoting economic recovery, dealing successfully with inflation, maintaining the free trade system, resolving energy questions, and alleviating North-South disparities, not only for their mutual benefit but for the peace and stability of the broader global community.



(1) Prime Minister Miki's Visit to the U.S.


Consistent with this Japan-U.S. cooperation, Prime Minister Miki took part in the Puerto Rico Summit Conference held on June 27 and 28 at the initiative of U.S. President Ford to exchange views on the problems of the international economy with the leaders of the United Kingdom, France, West Germany, Italy, and Canada, after which Prime Minister Miki visited Washington, D.C., on June 30 for a frank exchange of views with President Ford on bilateral and international issues of mutual concern.

In addition to these summit talks, 1976 also saw Japan-U.S. consultations at all governmental levels, including the September exchange of views between Foreign Minister Kosaka and Secretary of State Kissinger, on the occasion of the former's attendance at the United Nations General Assembly, covering issues such as the overall Japan-U.S. relationship, relations with China, problems of the Korean Peninsula, etc.



(2) Participation in the American Bicentennial


Japan-U.S. friendship is being strengthened not just in the political and economic fields but also in science and technology, cultural exchanges, and other fields. The American bicentennial year of 1976 witnessed a further deepening of this mutual friendship at both governmental and private levels.

On the occasion of the meeting with President Ford on June 30 in Washington, D.C., following the Puerto Rico Summit Conference, Prime Minister Miki presented President Ford a message of bicentennial congratulations from the Government and people of Japan. That same day, he also attended with President Ford a ceremony marking the donation of funds from the Government and people of Japan for the completion of the Studio Theater in Washington's John F. Kennedy Center for the Performing Arts.

Seedling cherry trees have also been given to the cities of Los Angeles, San Francisco, and Seattle as gifts from the Government and people of Japan.

By the same token, Japan took part in a great many other commemorative events at all levels, including sending the Nippon-Maru to participate in the Operation Sail parade in New York and donating bonsai to the National Arboretum. These efforts are felt to be significant in helping Japan and the U.S. build true mutual understanding while overcoming the differences in cultural and historical backgrounds.



(3) Japan-U.S. Relations after the Inauguration of President Carter


Democratic candidate Carter won over incumbent President Ford in the Presidential election of November 2, 1976, and was inaugurated on January 20, 1977 as the 39th President of the United States.

Newly inaugurated President Carter has long stressed the importance of strengthening U.S. ties with Japan and Western Europe, and thus there is expectation that the friendly and cooperative relations between Japan and the U.S. will become even closer under his Administration.



Vice President Mondale's Visit to Japan


In addition to conferring by telephone with Japanese and West European leaders immediately prior to his inauguration in order to promote close communication, President Carter also sent Vice President Mondale on a one-week tour from January 23 to the leading European nations and Japan to stress the importance his Administration attaches to relations with these allies.

Visiting Japan from January 30 through February 1 after stops in Belgium, West Germany, Italy, the United Kingdom, and France Vice President Mondale met with Prime Minister Fukuda on January 31 and February 1 for a frank exchange of views on issues of mutual concern, such as the global economy, bilateral trade, and Asian peace and stability. At the same time, on behalf of President Carter, he invited Prime Minister Fukuda to visit the United States.


Prime Minister Fukuda's Visit to the U.S.


Prime Minister Fukuda visited the United States in March 1977, meeting with President Carter on March 21 and 22. In these summit meetings, which centered around the theme of "Japan-U.S. cooperation in the global context," the two leaders held candid talks concerning various issues, such as the problems facing the world economy, the peace and prosperity of the Asia-Pacific region, peaceful use of atomic energy, bilateral trade and nuclear non-proliferation. They also reconfirmed the importance of further strengthening Japan-U.S. ties for coping with the many problems facing the international community. Prime Minister Fukuda also took advantage of this opportunity to invite President Carter to visit Japan and the President accepted this invitation with deep appreciation. It is expected that the friendly relations between Japan and the U.S. will be further deepened and expanded in the years to come.



2. Canada



(1) While economic relations between Japan and Canada are very close, cooperative relations between the two nations have also developed in recent years in a broad variety of fields such as politics, culture, and science and technology. As a fellow industrialized democracy bordering on the Pacific basin, Japan has made it a matter of policy to strengthen relations of cooperation and friendship with Canada across a broad spectrum of fields.

Active exchanges were conducted at all levels of both the governmental and private sectors in 1976, including the visit to Japan of Prime Minister and Mrs. Trudeau, and it was a year of ambitious striving for expanded mutual understanding between the two peoples.



(2) Prime Minister and Mrs. Trudeau's Visit to Japan


At the invitation of the Government of Japan, Prime Minister Trudeau and his wife visited Japan from October 20 through 26. During this visit, Prime Minister Trudeau was received in audience by Their Imperial Highnesses the Emperor and Empress and met twice with Prime Minister Miki to exchange views on bilateral and international matters of concern to both nations. Prime Minister Trudeau also paid a courtesy call on House of the Representatives Speaker Maeo, and conferred with Dietmen as well as with representatives of business circles. In the talks which Prime Minister Trudeau had with Prime Minister Miki, Deputy Prime Minister Fukuda, and other members of the Japanese Cabinet, mutual understanding concerning each other's positions and policies on bilateral and international issues was deepened and the foundations for close and cooperative relations between the two nations further consolidated.

The visit of Prime Minister Trudeau was highlighted by the signing of the Cultural Agreement between Japan and Canada and of the Framework for Economic Cooperation between Japan and Canada. This Cultural Agreement between Japan and Canada is a mainstay for expanding and strengthening Japan-Canada cultural and scholarly exchanges on a more stable base, containing provisions for assistance and cooperation for promoting expanded exchanges between the peoples and organizations in the fields of culture and education. The Framework for Economic Cooperation between Japan and Canada, an expression of political intent to further strengthen the economic relations between Japan and Canada, contains provisions for further developing these relations, including provisions for holding regular joint committee meetings annually between the two Governments to review and promote Japan-Canada economic relations.



IV. Latin America



(1) Japan and the nations of Latin America have traditionally maintained relations of friendship and cooperation, and there are no serious political problems between them. Japanese diplomatic policy toward the Latin American region is one of respecting each other's positions, promoting mutual understanding, and seeking to strengthen mutually beneficial cooperation.


(2) Latin America is among the regions with the richest natural resources and agricultural products, besides possessing promising fishing grounds off their coasts. Latin America is thus coming to play an increasingly important role in the solving of the worldwide problems of resources and foodstuff shortages.

In recent years, the nations of Latin America have enjoyed political stability and have been pushing forward their ambitious domestic socioeconomic development programs. They are also making positive approaches to Japan, and Japan is endeavoring to meet the expectations of these nations to the best of its ability in cooperating in their economic development efforts.


(3) On the basis of the thinking noted above, Japan made the following diplomatic efforts toward Latin America during 1976.


(a) Brazilian President Geisel visited Japan as state guest in September 1976. This visit by President Geisel, by deepening the mutual understanding between the two peoples, served to further strengthen the traditional relations of friendship and cooperation.


(b) The Japanese Government invited from Latin American countries such Cabinet-level officials as Cuban Vice Premier Rodriguez, Argentine Minister of Economy Martinez de Hoz, Ministers from Paraguay, Chile, and Peru, and the President of the National Congress of Guatemala, thereby promoting mutual understanding between Japan and these nations.


(c) Some of the concrete achievements of Japan's economic and technical cooperation to Latin American countries are as follows:

Yen loans were extended to Costa Rica and Peru. The grant of fishery training vessels and other forms of cooperation were extended to Surinam. An economic cooperation survey mission was sent to Paraguay to explore the possibilities of new economic and technical cooperation projects. Among other agreements concluded were the Agreement on Technical Cooperation with Colombia and the Cooperation Agreement on Marine Products Processing Center with Peru.

In the area of multilateral cooperation, Japan became an extra-regional member of the Inter-American Development Bank in July 1976.


(d) In the field of cultural exchanges, Latin American artists were invited to Japan and Japanese-language instructors were sent to Latin America. In addition, assistance was also provided to the Center of Japanese Studies in Brazil.



V. Western Europe



Japan's cooperative relations with the nations of Western Europe are most important, both in view of the position and role of Western Europe in the international community and in light of the Japanese desire to strengthen cooperation with the advanced industrial democracies, including the United States. In line with this basic thinking, Japan continued its efforts for closer dialogue and harmony with the nations of Western Europe in both bilateral and multinational forums. Japan-Europe relations have developed smoothly in the past years, but in the latter half of 1976 criticism of the trade imbalance with Japan began to be heard loudly against the background of an uncertain political situation and economic difficulties, such as sluggishness in such key industries as steel and shipbuilding. This issue has also shown signs of becoming politicized, and Japan has endeavored to resolve the problems involved with a view to maintaining and strengthening Japan-Europe friendship.



(1) For Closer Dialogue and Harmony


Among the exchanges of views between Japanese and European leaders must be included the frank discussions at the Puerto Rico Summit of Heads of State and Government attended by Prime Minister Miki as well as the leaders of four Western European nations. In addition, French Prime Minister Chirac visited Japan in July accompanied by Minister of Trade (now Prime Minister) Barre and Foreign Minister Sauvagnargues for talks with Prime Minister Miki and the holding of the Regular Consultations between Japan and France. Other European dignitaries who visited Japan during the year to exchange views included the Minister of Industry and Research (in April) and the Minister of Planning and Regional Equipment (in September) from France, the Secretary of State for Foreign and Commonwealth Affairs (in May for the Japanese-British Regular Consultations), the Chief Secretary of the Treasury (in June), and the Minister of State for Industry (in September) from Britain, the Foreign Minister (in June) from Denmark, and the Minister of Commerce and Shipping (in September) from Norway.



(2) Japan-Europe Trade


The EC took advantage of the Doko Keidanren Mission's October 1976 visit to Europe, the November meeting of the Council of Europe, and other opportunities to request forcefully for rectification of the Japan-EC trade imbalance, the sudden surge in Japanese exports of certain products, barriers to expanded EC exports to Japan, and other economic problems which had been building for some time, and thus the issue of correcting the imbalance in Japan-EC trade was pushed to the forefront in the second-half of 1976. In response, Japan has done what it can for the time being on both the import and export sides, while maintaining the following basic positions:


(a) Japan stands for the maintenance of free-trade principles.


(b) With regard to the trade imbalance, it is necessary to consider it in conjunction with invisible trade and in the entire context of the world economy, and at any rate it should be solved in the context of balanced expansion of trade.


(c) The efforts for expanding EC exports to Japan must basically come from the EC side. At the same time, Japan has also worked to activate personal exchanges at all levels and to step up public information activities for improved mutual understanding in view of the fact that much of the economic friction between Japan and the EC stems from lack of understanding and from the differing economic, social, and cultural natures of the two sides.

It is essential for Japan to continue to endeavor to over-come difficulties and develop a new relationship of cooperation aiming at balanced expansion in the economic field and to build a broad-based relationship through strengthening dialogue in the political field and promoting cultural exchanges.



IV. Soviet Union and Eastern Europe



1. Soviet Union



(1) Overview of Japanese-Soviet Relations


Although the Soviet Union and Japan have different political ideals and social systems, the Soviet Union is nonetheless an important neighbor for Japan. Accordingly, Japanese diplomacy toward the Soviet Union is directed toward establishing stable good-neighborly and friendly relations based upon mutual understanding and trust. Not only is the establishment of such Japanese-Soviet relations in the interest of both countries, it will make an important contribution to the peace and stability of East Asia and all the world.

Japan is striving to expand relations with the Soviet Union based on this fundamental position, and these relations have progressed satisfactorily in recent years in a wide range of fields, including trade, economic, cultural, and personal exchanges. For example, the volume of two-way trade between Japan and the Soviet Union in 1976 exceeded $3.4 billion, one of the largest two-way trade figures with the U.S.S.R. recorded by any industrialized Western nation. On economic cooperation for Siberian development, seven development projects have been initiated since 1966 (of which two have been fully implemented) and Japan has extended development credits to the Soviet Union totaling approximately $1,470 million in connection with Siberian development cooperation.

Although Japanese-Soviet cooperation is thus proceeding smoothly at the working level, the very important problem of effecting the return to Japan of its four northern islands, Habomai, Shikotan, Kunashiri, and Etorofu, and the conclusion of a Japanese-Soviet peace treaty remains pending.

The Japanese Government is convinced that settlement of this Northern Territories issue and conclusion of a peace treaty are indispensable to the establishment of truly stable and lasting relations of friendship between Japan and the Soviet Union. It has continued to work for the solution of the pending problems.

The year 1976, which was the twentieth anniversary of the reestablishment of diplomatic relations between Japan and the Soviet Union, was indeed an eventful year in the relationship. For example, in January with the visit to Japan by Soviet Foreign Minister Gromyko the first Japanese-Soviet peace treaty negotiations took place in Japan; in February, General Secretary Brezhnev stated in his speech to the 25th Soviet Communist Party Congress that Japan's claim to reversion of the Northern Territories was "an illegal demand by some people"; in May, the Matchekhine incident (in which a correspondent named Matchekhine from the Novosti press agency was arrested for infringements against Japanese law); in July, the Baikal incident (involving the murder of a Japanese university coed aboard a Yokohama-Nakhotka liner, the Baikal); in August, talks took place between General Secretary Brezhnev and visiting Keidanren Chairman Doko; in September, Japanese visits to family graves on the northern- islands were cancelled, a MIG-25 made a forced landing at Hakodate Airport, Foreign Minister Miyazawa made an inspection visit to Nemuro, and Foreign Minister Kosaka had talks with Soviet Foreign Minister Gromyko; and finally in December, a Decree of the Presidium of the Supreme Soviet established the Soviet 200-mile fishery zone.

Although some of these events were chance occurrences not fundamentally affecting Japanese-Soviet relations, others such as General Secretary Brezhnev's February speech or the cancellation of visits to family graves served to illustrate the harsh Soviet stance on the question of Japan's Northern Territories. At the same time, the establishment of the 200-mile fishery zone made it necessary to find a new framework for the Japanese-Soviet fishery relationship, which has long been one of the pillars of bilateral relations.



(2) The Northern Territories (and Peace Treaty Negotiations)


The Regular Japanese-Soviet Foreign Ministerial Consultations and negotiations on the conclusion of a Japanese-Soviet peace treaty were conducted in January 1976 when Foreign Minister Gromyko visited Japan. The territorial issue was discussed as the main problem in the negotiations between Foreign Minister Gromyko and Foreign Minister Miyazawa and in the talks between Foreign Minister Gromyko and Prime Minister Miki. The Soviet stance remained unyielding and no concrete progress was made on this territorial question. Nevertheless, after repeated negotiations, confirmation was obtained of the relevant portion of the October 10, 1973, Japanese-Soviet Joint Communique, which had been drawn up on the understanding that the issue of the four northern islands is among "those problems unresolved since World War II," and it was agreed to continue negotiations for an early conclusion of a peace treaty.

On February 24, however, General Secretary Brezhnev made an unwarranted and extremely distorted assertion at the 25th Party Congress on Japan's claim for return of the Northern Territories, saying, "With regard to the peaceful settlement of problems, there are some people in Japan who under direct outside instigation would lodge groundless and illegal demands against the Soviet Union." In response to this, Japan made clear again to the Soviet side its basic position on this issue through diplomatic channels.

Again the Soviet Union disregarded the long-established custom based on humanitarian considerations of allowing Japanese to visit their family graves in the Northern Territories and instead demanded that such people must hold passports visaed by the Soviet Government. As a consequence these visits to family plots had to be canceled for 1976.

On September 11, Foreign Minister Miyazawa became the first incumbent Foreign Minister to visit Nemuro and to inspect the Northern Territories from the sea. This visit was made in response to the long-standing and strong desire of local residents that the Foreign Minister, who is in charge of these territorial negotiations, make an on-the-spot inspection. The visit reaffirmed the Government's unwavering stand to conclude a Japanese-Soviet peace treaty by realizing the return of all four northern islands.

At the United Nations General Assembly held in New York in late September, discussions were also held between Foreign Minister Kosaka and Soviet Foreign Minister Gromyko. While Foreign Minister Gromyko indicated a willingness to discuss the issue of a peace treaty, he took a harsh position that the Soviet Union does not consider settling the territorial problem as included in the issues for conclusion of a peace treaty. Foreign Minister Kosaka pointed out that it was confirmed at the 1973 summit meeting that the issue of the four northern islands is an outstanding one to be resolved in any peace treaty and again clarified the Japanese position on this Northern Territories issue.

In the Japanese-Soviet fishery negotiations begun on March 15, 1977, the negotiating was made difficult by Soviet insistence that Japan accept a Soviet 200-mile fishery zone including the waters off the four northern islands, as stated in (3) below. (However, these fishery negotiations were finally concluded on May 27, 1977, with a compromise not in the least vitiating the Japanese stand on this territorial issue.)



(3) Establishment of the Soviet Fishery Zone and Start of Japanese-Soviet Fishery Negotiations


On December 10, 1976, the Soviet Union promulgated the Decree of the Presidium of the Supreme Soviet regarding the establishment of a Soviet 200-mile fishery zone and announced that it would exercise its jurisdiction over all fishery and marine resources in the waters within 200 miles contiguous to the Soviet Union's coast and that fisheries by foreign nationals in these waters would be permitted only by agreement between the Soviet Union and that foreign nation. Furthermore, the Soviet Union defined the North Pacific waters to which this Decree is to apply by the February 24, 1977, decision of the Soviet Council of Ministers announcing that the measures provided for in the Decree would apply in these waters as of March 1. (Because these waters to which the Decree was to apply included the waters around those four northern islands which are inherently Japanese territory, Japan promptly issued on February 25 a protest in the form of the Chief Cabinet Secretary's statement, refusing to recognize such a unilateral action by the Soviet Union. Vice Minister for Foreign Affairs Sato made the above protest to Soviet Ambassador Polyanskii in Tokyo on February 26.)

With the implementation of the Soviet 200-mile fishery zone, it became necessary to formulate a new fishery order between Japan and the Soviet Union. Minister of Agriculture and Forestry Suzuki visited the Soviet Union from February 28 through March 5 and met with Fisheries Minister Ishikov, as a result of which understanding was reached on March 3 to conclude new fishery agreements between the two nations and to open initial discussions to conclude an interim agreement applicable for the remaining period of 1977. In line with this understanding, negotiations were begun in Tokyo on salmon and trout catch quotas based upon the long-standing Japanese-Soviet High Seas Fishery Treaty and in Moscow on ensuring Japanese fishery rights in the Soviet 200-mile fishery zone.



(4) Visits to Graves and Unrepatriated Japanese


During Foreign Minister Gromyko's January 1976 visit to Japan, Foreign Minister Miyazawa requested Soviet consideration so that visits to Japanese graves on the four northern islands, within the Soviet Union, and on Sakhalin may be carried out as desired by the Japanese side and so that those Japanese who were left behind in the Soviet Union at the end of World War II may be promptly repatriated to Japan. In response, Foreign Minister Gromyko indicated that favorable consideration in principle would be given to Japanese wishes concerning visits to graves and that favorable study would be given to repatriation of Japanese should such requests be received from the individuals themselves. (However, as detailed in (2) above, the 1976 visits to graves in the Northern Territories had to be canceled.)



2. Eastern Europe and Yugoslavia



Japan's basic foreign policy toward the countries of Eastern Europe is to strengthen friendly relations with them through promoting economic, cultural, and personal contacts. In 1976 too, efforts were continued for a broad range of exchanges in order to promote mutual understanding with these peoples.

Such exchanges included visits to Japan of Yugoslav Minister of Finance M. Cemovic in October and of Hungarian Deputy Prime Minister I. Huszar in October; a visit to Yugoslavia by the Crown Prince and Princess in June; a visit to Bulgaria by Director General of the Prime Minister's Office Ueki in July; as well as two consecutive visits to some countries of this region by a Governmental Mission for Scientific Cooperation and by an International Finance Mission organized by the Institute for Financial Affairs, Inc., in May and June.

The improvement in Japan's relations with these East European countries is also shown by the ratification and effectuation of the Treaty of Commerce and Navigation with Hungary in September, the signing of the Convention on the Avoidance of Double Taxation with Rumania in February, and the signing and effectuation of an arrangement concerning the promotion of cultural exchange with Czechoslovakia in January.

Japan's trade with Eastern Europe and Yugoslavia, which had marked a decrease of approximately 10% to $910 million in total in 1975 compared with that in the previous year, declined further in 1976 to approximately $860 million. This decline can be attributed to the low level of Japan's imports as a result of domestic recession and to the unavoidable restrictions on imports instituted by East European countries because of their unfavorable foreign exchange positions and their accumulated debt burden to the Western countries. However, there still remains enough scope for developing economic and trade relations as well as industrial cooperation between Japan and these countries in the light of their need to introduce advanced industrial technology from the developed countries of the West in order to successfully carry out their new five-year economic development plans and of the importance of these countries as a market for Japanese plant exports.



VII. Near and Middle East



(1) In recent years, the Near and Middle East, a significant source of petroleum and export market for Japan, has been exercising an increasingly important influence on international politics and economics. Any major conflict erupting in this region would have a far-reaching impact on world peace and stability and might seriously affect Japan's economic development.

Fully cognizant of this situation and desirous of a just and lasting peace to be established in the Middle East at the earliest possible date, Japan supports international efforts to this end and is seeking to maintain and further promote friendly relations with the nations of this region through strengthening economic and trade ties, expanding economic and technical cooperation, and encouraging personal and cultural interchanges.


(2) Main events in 1976 were as follows. In 1976 little progress was seen in the Middle East peace negotiations. Japan on its part has long advocated the need to fully implement U.N. Security Council Resolution 242 and to respect the legitimate rights of the Palestinians under the United Nations Charter in order to achieve lasting peace in the Middle East. In addition, Japan has been calling in the United Nations and other forums on all the parties concerned to promptly begin discussions to reach a peaceful settlement of the Middle East dispute.

Japan recognizes the Palestine Liberation Organization (PLO) as representing the Palestinians and considers it appropriate to recognize the participation of the PLO in peace negotiations as a party to the Middle East conflict, and especially the Palestine question. In April 1976, Kadoumi, director of the political department of the PLO, visited Japan and in December, PLO representatives came to Japan to open a PLO office in Tokyo (which was formally opened on February 1, 1977).


(3) Economically, approximately 80% of Japan's petroleum imports in 1976 came from Saudi Arabia, Iran, United Arab Emirates, Kuwait, and other oil-producing nations of the Middle East. At the same time, there was also continuing expansion of Japanese machinery and other exports to the Middle East. As a consequence, approximately 20% of Japan's total trade in 1976 was with the Middle East, a figure on a par with that for the United States. Because many of the nations of this region are employing their abundant oil revenues to promote ambitious economic and social development plans, it is anticipated that their economic relations with Japan will become increasingly broad and deep.

The nations of the Middle East keenly desire every manner of economic cooperation from the advanced industrial nations, including Japan, in connection with their economic plans, social projects, and industrialization. Japan's economic cooperation with the nations of this region developed smoothly in 1976. Japan extended economic cooperation, including yen loans totaling over \46.4 billion, to the four nations of Egypt, Morocco, Sudan, and Iran, as well as technical cooperation comprising the furnishing of equipment, receiving of trainees in Japan, and the dispatch of experts to them. In January 1976, Minister of International Trade and Industry Komoto visited the four nations of Saudi Arabia, Iran, Iraq, and Egypt in an effort to develop Japan's relations with these nations, including economic and technical cooperation.


(4) Japan is also stressing expanded personal and cultural contacts with the nations of the Near and Middle East. Visitors from the Middle East to Japan during 1976 included Moroccan Prime Minister and Mrs. Osman in February, Jordan's King Hussein and Queen Alia in March, Qatar Minister of Finance and Petroleum Abdul Azi and Libyan Petroleum Minister Al-Mabruk in May, and Egyptian First Lady Jihan Sadat in October. From the Japanese side, visitors to the Near and Middle East included the Minister of International Trade and Industry in January, the state visit to Jordan by the Crown Prince and Princess in June, and visits by a large number of influential figures from both the government and private sectors.

Cultural exchanges were also promoted and their expansion sought through dispatch of Japanese ikebana experts and holding of exhibitions. Believing such personal and cultural exchanges to be one of the best means of fostering mutual understanding and kinship between the nations, Japan intends to continue its efforts in this field.



VIII. Africa



(1) In line with its basic foreign policy of strengthening friendly and mutually beneficial relations with Africa, Japan in 1976 continued its efforts to further enhance and consolidate cooperative relations with African nations.


(2) Recognizing the issue of southern Africa as a most serious concern common to all African nations, Japan, with deep understanding and sympathy, takes a fundamental position of extending the maximum cooperation within its capacity to help bring about a fair solution to this problem. The main policy steps taken from this perspective were as follows:


(a) Japan recognized the People's Republic of Angola on February 20 and established diplomatic relations with that country on September 9. Japan also entered into diplomatic relations with Mozambique on January 9, 1977.


(b) In response to the U.N. Security Council resolution calling for assistance to Mozambique, Japan on December 14 contributed emergency aid amounting to \250 million to that country through the U.N. High Commissioner for Refugees. Japan provided additional aid in food, valued at \310 million, under an exchange of notes with the World Food Program (WFP) that took place on March 4, 1977.


(c) As in 1975, Japan made a subscription to the U.N. southern Africa funds, amounting to $210,000, for the purpose of providing relief, education, and training to the victims of racial discrimination and colonial rule in southern Africa.


(3) With regard to economic and technical cooperation, Japan continued to strengthen its assistance from the view-point of helping African nations in their nation-building efforts. Characteristic of Japan's assistance in 1976 was that, as shown below, there was considerable progress with respect to grant aid.


(a) Japan extended grant aid amounting to \100 million to Gambia in May to help finance that country's fishing fleet development plan; \380 million to Niger in December for its transportation development program; and \350 million to Senegal in March for its fishery development plan. In each case an exchange of notes took place between Japan and the recipient country.


(b) In June an exchange of notes took place with Madagascar, whereby Japan extended yen credit amounting to \1 billion to help finance the Namorona River power development program.


(C) The series of visits to Japan by prominent African leaders, including the Minister of Economy and Commerce and the Minister of Finance and Planning of Madagascar, the Minister of Industrial Development and Environment of the Republic of Senegal, the Minister of Foreign Affairs and the Minister of Economy of the Republic of Chad, testifies to the great expectations of African nations for Japanese economic and technical cooperation. During their visits, these African leaders held talks with their Japanese counterparts and other high-ranking government officials here on ways and means to further promote bilateral cooperation.


(4) Japan established an embassy in Guinea on January 20.


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