Section 2. Major International Developments


International developments from 1987 to 1988 have testified to an increase in Japan's role in international society, which forms the background of "basic tasks for Japanese foreign policy" as mentioned in the previous section.

In this section, we will review major international developments in the period under consideration. Section 3 will render accounts of major diplomatic activities Japan undertook amid those developments.


1. Major International Political Developments


(1) Trends toward dialogue between the East and the West gradually increased as the U.S.-Soviet summit meeting resumed in Geneva in 1985, which was followed by another meeting in Reykjavik in 1986. The summit was also held in Washington in December 1987 and Moscow in May-June 1988. Against the background of these talks, several noteworthy developments toward improving the East-West relations were witnessed. For example, the United States and the Soviet Union signed an INF (intermediate-range nuclear forces) agreement in December 1987, which took effect in June 1988, while an accord on the question of Afghanistan was signed in Geneva in April 1988, which included the withdrawal of Soviet troops from that country.

Soviet General Secretary Mikhail Gorbachev visited the United States in December 1987 and U.S. President Ronald Reagan the Soviet Union in May-June 1988, marking the first mutual visits in 14 years by the top leaders of the two countries. Through their talks, Gorbachev and Reagan confirmed the importance of the summit and agreed to continue it. These high-level talks between the two countries, coupled with their foreign ministers' frequent meetings, made a great deal of contribution to the stability of the East-West relations.

Talks on the INF agreement went through lots of twists and turns throughout 1987, but it was signed between Gorbachev and Reagan during the Soviet leader's visit to the United States in December 1987. The accord came into effect on June 1, 1988, when Gorbachev and Reagan exchanged ratifications in Moscow. The accord is significant as it will eliminate existing intermediate-range missiles on a global scale, including those deployed in Asia, and sets forth detailed provisions regarding intrusive verification arrangements including on-site inspections.

While strategic nuclear weapons are of basic importance to arms control and reduction talks, START (Strategic Nuclear Arms Reduction Talks) are facing rough going over the questions, such as their relation to DST (Defense and Space Talks) and verifications. The U.S.-Soviet summit in Moscow made no substantial progress. But as the two countries have agreed in principle on a 50% cut in strategic nuclear forces, they are continuing negotiations with the aim of achieving the accord.

The East-West relations should go beyond arms control and reduction talks; among the regional problems in the framework of the East-West relations, on April 14, 1988, Pakistan and Afghanistan concluded their indirect talks on the Afghan problem in Geneva, which began in June 1982 through the mediation of U.N. Undersecretary-General Diego Cordovez, personal envoy of the U.N. Secretary General. Pakistan, Afghanistan and guarantors - the United States and the Soviet Union - signed four agreements and one memorandum of understanding, featuring mutual non-interference by Pakistan and Afghanistan, international guarantee by the United States and the Soviet Union, the withdrawal of Soviet troops, and the voluntary return of refugees and so on. The Soviet Union began withdrawing its troops on May 15.

These developments in the East-West relations apparently resulted from the negotiations the United States has carried on with the Soviet Union against the background of the strong unity among Western-bloc countries, which was based on their basic policy of maintaining deterrence while promoting dialogues with the East. In other words, Western countries have maintained their unity under the basic stance that progress must be made in all the areas of arms control and reduction, regional conflicts, human rights and bilateral issues in order to establish an eternal base to realize deterrence and dialogue as well as stable and constructive relations between Eastern and Western countries. These goals were reconfirmed in the "Statement of East-West Relations" adopted at the summit of seven major industrial democracies in Venice in June 1987 and again in the political declaration issued on the occasion of the Toronto Summit in June 1988.

As well, the Soviet leadership under General Secretary Gorbachev showed flexible attitudes toward, for example, elimination of medium-range SS-20 nuclear missiles and the withdrawal of Soviet troops from Afghanistan. Basically, the Soviet Union seems to find it inevitable to improve its relations with Western countries because their capital and technology are needed to carry out Gorbachev's domestic economic restructuring. In addition, Moscow was apparently led by the judgment that elimination of its INF will contribute to its security because of Washington's removal of its own INF from Europe and that withdrawal of the Soviet troops from Afghanistan will improve its external image and relations with other countries and promote economic reforms. Gorbachev is capable of calculating cost effectiveness and has a resolute character of carrying out a policy based on his calculations. In this respect, he is different from conventional Soviet leaders; therefore, his administration is expected to provide many opportunities to create stable East-West ties through dialogues. However, these new developments do not mean than the Soviet Union has fundamentally changed its basic strategy. It is more reasonable to understand that there is no change in its goal of building a "Strong Soviet Union" in political, economic, social, military and all other aspects in order to maintain a superpower status.

Developments in the past year or so included aforementioned events favorable to the Western bloc. In principle, however, there is no denying the fact that East-West relations are in a state of confrontation. The War-saw Pact's supremacy of conventional forces in Europe and the Soviet Union's military buildup in the Far East continue to pose serious problems. Under these circumstances, NATO's strategies after the elimination of INF are being reviewed. Moves toward strengthening European countries' defense capabilities on their own are accelerating. Among them are military cooperation between France and the Republic of Germany and the revitalization of the WEU. In addition, European countries are considering the question of burden sharing in response to worsening U.S. fiscal conditions.

Against the backdrop of these developments in East-West relations, Japan is playing a greater role as a member of the West, as demonstrated by appreciation given to Japan's position and activities by other participants in the Venice and Toronto Summits, which sought to cement Western unity. In the long process toward the conclusion of the INF agreement, Japan's persistent support of the U.S. position seeking the elimination of INF on a global basis including Asia made a great deal of contribution to the signing of the accord.


(2) Eastern countries are implementing various reforms to overcome their economic impasses. In the Soviet Union, Gorbachev put into practice the state-run enterprise law, the cooperative law and other economic reforms, while pushing ahead with political "openness" and "democratization." The economic reforms, however, are slow to produce results. Controversies on the tempo and methods of the "perestroika" intensified as in the case of ousting Voris Yeltsin in November 1987. Furthermore, political perestroika is not going easily as "openness" caused ethnic unrest in many parts of the country. At the 19th party conference of the Soviet Communist Party held from June 28 through July 1, 1988, Gorbachev stressed the importance of political reforms. As a result, the conference decided to reform the soviets (to strengthen their power), create the chairmanship of the Supreme Soviet, and introduce a tenure system (up to two five-year terms). How the Soviet Union will carry out these reforms deserves attention. While going ahead with the perestroika, Gorbachev is calling on East European countries to revitalize their economies in line with their internal conditions. Because of their different political, social and economic conditions, East European countries are reacting to the perestroika differently. In particular, Gorbachev's policy of "democratization" and "openness" has created a stir in some of these countries due to their past experience.


(3) Although the Soviet Union continues trying to improve its relations with China, Beijing maintains that the solution of "three obstacles," particularly that of the Cambodian problem, is a prerequisite for the normalization of bilateral relations. Nevertheless, the two countries are improving their ties at a practical level. Their border negotiations were held twice in 1987 and are continuing. On the Cambodian problem, deputy foreign ministers of the two countries held special talks in August 1988 following the Sihanouk-Hun Sen talks in December 1987 and January 1988 and an informal meeting in Jakarta in July 1988.

Sino-U.S. relations experienced moderate friction over such issues as the Tibetan question and China's arms sales to Iran. In principle, however, their relations are favorable as shown in the fact that U.S. and Chinese leaders confirmed bilateral friendship on the occasion of their mutual visits including Foreign Minister Wu Xueqian's in March 1988.


(4) The Afghan problem has made substantial progress as mentioned above. In addition, Iran and Iraq stopped fighting on Aug. 20 as a result of the U.N. Secretary General's mediation, which followed Iran's acceptance of U.N. Security Council Resolution 598 calling for an early cease-fire. With regard to other major regional conflicts such as those in the Middle East, Angola-Namibia, Cambodia and Central America, countries involved and other parties concerned made greater efforts to settle them.

But these disputes are so deeply rooted that it will take time to bring total peace to these regions.

Japan has received high international evaluation for its diplomatic efforts to seek political solutions to these conflicts at the United Nations or through relations with countries concerned and for its strong support of U.N. efforts to settle the Afghan problem and the Iran-Iraq conflict. At the same time, greater expectations are being placed on Japan's role in this area.


2. Major International Economic Trends


The world economy is facing the continuation of a huge external imbalance which is heightening protectionist pressure. The global stock market plunge in October 1987 and subsequent economic developments such as the steep fall in the dollar's value highlighted uncertainty over world economic trends. Besides, no substantial improvements were seen on the problem of accumulated foreign debts of developing countries.

In principle, however, the world economy keeps growing moderately without inflation. The question of external imbalance is showing signs of improvement as U.S. exports are increasing steadily, while Japan is importing more. Amid the diversified development of Third-World countries, the rapid growth of newly industrializing economies (NIEs) in Asia is drawing strong attention and their position in the world economy has become a focus of international debates.

Against the background of these world economic trends, Japan has carried out various measures to expand domestic demand in order to increase imports. It has also stepped up international cooperation on a macroeconomic level to meet its responsibility as a major economic power accounting for much more than 10 percent of world GNP. With regard to Asian NIEs which are expanding their presence in the world economy and trade and to whose activities attention is being paid from in and out of the region, greater expectations are being placed on Japan's role as a promoter of dialogue between NIEs and industrialized countries in the West.


(1) In 1987, the United States continued to live with its "twin deficits." Western countries sought to strengthen their cooperation through such occasions as the Group of Five (G5) and Group of Seven (G7) meetings, the ministerial council meeting of the OECD (Organization for Economic Cooperation and Development), and the Economic Summit. Although these efforts somewhat bore fruit, stock prices plunged in the United States in October 1987, against such background as uncertainty about the U.S. economy and other elements. The United States, despite its position as the key-currency nation, has become the largest net debtor nation in the world, while the dollar's downturn accelerated worldwide. Under these circumstances, U.S. lawmakers and other people concerned strengthened their demand for "fairness" in trade, as was witnessed in the passage of the omnibus trade bill.

The stock market crash led Americans to change their perception of the U.S. economy. In 1987, President Reagan agreed with Congress on plans to reduce the U.S. fiscal deficit, helping the American people recognize anew the importance of reducing fiscal deficit. Regarding its external imbalance, the United States has recently begun showing signs of reducing its trade deficit. It is premature, though, to conclude that favorable economic performance such as a sharp drop in the trade deficit will immediately fend off protectionist pressure. In the meantime, the United Kingdom has achieved relatively strong growth, but the Federal Republic of Germany and other West European countries have shown modest growth.

The Uruguay Round of talks under GATT (General Agreement on Tariffs and Trade) got under way in September 1986 with a view to maintaining and strengthening an open multilateral trade system. Based on various proposals submitted by member countries, preparations were made for the launch of full-fledged negotiations in 1987-1988.


(2) As to the external economic relations among industrialized countries, the importance of making a success of the Uruguay Round has been repeatedly stressed, while the United States is stepping up its approach of seeking to open up foreign markets through negotiations on a bilateral basis. Moves toward regional economic integration have also been witnessed. The United States and Canada signed a free-trade agreement for the purpose of promoting bilateral trade and investment. The EC's (European Community) drive to create an integrated internal market in 1992 has accelerated since the Single European Act came into effect in July 1987. Within the EC, economic activities, with an eye to an integrated market comprising 320 million people, are already gathering steam. EC countries are also strengthening their economic ties with neighboring nations, including those forming the EFTA (European Free Trade Association).


(3) Developing countries' accumulated foreign debts not only cause them trouble but also pose a serious threat to the sound growth of the world economy. Although parties concerned carried out concerted actions such as relief industrialized countries of the poorest countries' debt burden and straightforward discussions at the Toronto Summit in June 1988, no substantial progress has been made yet. In particular, the worsening situation in African countries attracted worldwide attention.

Developing countries are showing varying economic performances because of their different economic policies and trade structures. Economic circumstances in some of those countries are further deteriorating due to the worsening debt situation and lower prices of primary products, while Asian NIEs are performing noticeably well. Developed countries have increasingly recognized the need of dialogue and cooperation with the NIEs as demonstrated by the fact that the question of NIEs was taken up at the OECD ministerial council meeting in May 1988 and the Toronto Summit the following month.


(4) Crude oil prices remained relatively firm in the first half of 1987 but turned weaker in 1988 due to increased oil production that followed intensified antagonism within OPEC (Organization of Petroleum Exporting Countries). Nevertheless, environments surrounding the international oil market are changing substantially in view of such events as the cease-fire brought to the eight-year-old conflict between Iran and Iraq.


3. Major Developments in the Asia-Pacific Region


Located in the Asia-Pacific region, Japan has historically and culturally close ties with countries there. The peace and stability of the region is indispensable to the peace and prosperity of Japan. And in recent years, as Japan's economic partner, the importance of this region is getting increasingly important.


(1) Although the Asia-Pacific region is so diversified, yet it is possible to point out that steady development of the Asia-Pacific is attributable to the following factors: (a) solid Japan-U.S. relations and U.S. commitment to the region, (b) China's policy line of economic development and open-door, (c) the advancement of democratization in the Republic of Korea, (d) rapid and remarkable progress of Asian NIEs, (e) cooperation and steady development among ASEAN (Association of Southeast Asian Nations).

Japan-U.S. relations have become stronger and closer than ever, and at the same time, the United States maintains its commitment to the Asia-Pacific region, recognizing its importance. These two aspects, the strong Japan-U.S. relations and the U.S. commitment to the region contribute greatly to the stability of the region.

China, at the 13th Party Congress from October to November 1987, confirmed that it would further promote "reform and openness." Old generation in the party leadership were replaced by younger ones in order to carry out this policy. Regarding its relations with other countries, China is pursuing less ideological foreign policies under the name of "independent policy," and is trying to strengthen peaceful international evnironment necessary for its basic policies of modernization.

The Republic of Korea has made a major turnabout toward democratization as symbolized by the "June 29 declaration for democratization." In the wake of constitutional amendments agreed by both the ruling and opposition parties, it held its first direct presidential election in 16 years, which was won by President Roh Tae Woo of the Democratic Justice Party. The new government was set up in February 1988, which meant the first peaceful transition of administration in the Republic of Korea's history. The people of the Republic of Korea are striving to make a success of the Seoul Olympics in September-October 1988, which will be attended by a record 161 countries including China and the Soviet Union.

Among Asian NIEs - the Republic of Korea, Taiwan, Hong Kong and Singapore - high growth rates have been marked due to the economy driven by exports and their good performances are not only vitalizing the economy of the Asia-Pacific region, but also deepening their interdependent relations with Japan and ASEAN. These developments are contributing to the economic prosperity and political stability of the region and eventually to the vitalization of the world economy.

ASEAN commemorated its 20th anniversary of its founding in December 1987 and the summit meeting was held in Manila to promote cooperation in the region. On the whole, ASEAN is achieving steady economic development while maintaining political stability.


(2) As mentioned above, the situation in the Asia-Pacific region is basically favorable to Japan. But there are the following tensions in the region:

First, the Soviet Union continues building up its military capabilities in quality and quantity in the Far East, the northwestern Pacific in particular. It is strengthening cooperation with North Korea (PRNK) and Vietnam in military and other fields, while undertaking peace offensives toward the Asia-Pacific region. These Soviet movements are apparently aiming at improvement of Moscow's strategic position, expansion of its political influence and weakening of U.S. military and political influence in the Far East. The Soviets are also trying to take advantage of economic vitality there.

Second, a Korean Air jetliner was blown up in November 1987, in the situation that tensions between North Korea and the Republic of Korea continued on the Korean Peninsula. The discrepancy in economic power between the two has further expanded. ROK is achieving stable economic growth along with a major turnabout toward democratization. In contrast, North Korea is still suffering from facing economic hardships. Under these circumstances, ROK President Roh issued a six-point special statement aimed at stabilizing of the situation in the Korean Peninsula through improving the North-South relations, cooperating with Japan and the United States in improving their relations with North Korea and so forth. Pyongyang, however, refused the proposal of the Republic of Korea. Since then there have been developments in the Peninsula, such as reopening of direct talks between North and South parliamentarians for the first time in 32 months. Situations in the Korean Peninsula still have to be carefully observed.

Third, the stationing of Vietnamese troops in Cambodia is the most destabilizing factor in Southeast Asia. The Sihanouk-Hun Sen meeting took place in December 1987 and January 1988 to seek a political solution to the Cambodian problem, including the withdrawal of Vietnamese troops. The conference was the first direct talks between the Khmer parties since the Vietnameses invaded Cambodia in December 1978 and expected to mark a step toward the settlement of the problem. But it failed to reach agreement on such important issues as the timing of Vietnam's participation in the process toward political settlement, the procedure for withdrawal of Vietnamese troops, and a future Cambodian political system, including the creation of a coalition government. In July 1988, four Cambodian forces, Vietnam, Laos and ASEAN countries held an informal meeting in Bogor on the outskirts of Jakarta. Although political solutions have been sought through these and other occasions, the problem is so complicated that it still needs close observation.

Fourth, in the Philippines there still remain destabilizing factors. An abortive coup d'etat led by Col. Gregorio Honasan occured in February 1988, the fifth by the Philippine armed forces since the Aquino regime was established in February 1986. As well, the NPA (New People's Army) continues guerrilla activities. But the Aquino government has regained much of lost support from the military and business circles as it carried out a cabinet reshuffle in September to shift its policies and power base to a more realistic line, and improve the treatment of military personnel. In the economic sphere, substantial growth rate marked 5.7% in 1987, higher than the previous year's rate of 2%. Other favorable developments included a national referendum on the new constitution in February 1987, elections of both houses of Congress in May, convocation of the new Congress in July, hosting of an ASEAN Summit in December. The most important task for the present is the maintenance of public order and the prompt implementation of practical measures for economic revitalization, including land reform.

Among other tensions are Sino-Vietnamese conflict over the Nansha Islands, continued friction between India and Pakistan over Kashmir and nuclear development, Indo-Chinese border dispute, and a racial problem in Sri Lanka. In the Southern Pacific, there were such destabilizing factors as a coup in Fiji and a separatist movement in French New Caledonia.

At the Toronto Summit, Japan as the sole participant from the Asia-Pacific region stressed the importance of the situation in the Korean Peninsula ahead of the Seoul Olympics and also explained the situation in the Philippines, the Cambodian problem and other issues. Such Japanese moves are believed to have helped the heads of government and foreign ministers of the other participants in the summit to better understand the situation in the the region. As part of its contribution to the world, Japan should continue its efforts to stabilize the situation in the Asia-Pacific region from a global point of view.



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