1. Speeches by the Prime Minister and the Foreign Minister at the National Diet


(1) Policy Speech by Prime Minister Noboru Takeshita to the 112th Session of the National Diet

(January 25, 1988)


At the resumption of this 112th Session of the National Diet, I would like to explain the administration's policies and to gain the understanding and support of the people for these policies.

I have just visited the United States and Canada and talked with leaders there in open and candid discussions. And late last year, I conferred with the ASEAN leaders in Manila. In these discussions, I have keenly felt the great international expectations of Japan and the magnitude of our role, and, as I stated in my first Policy Speech shortly after becoming Prime Minister, it is essential that we make Japan a country contributing to the international community and draw upon Japan's wealth and vigor for a better world.

The world is now at a major time of change. The international economic framework so long sustained by the overwhelming economic might of the United States is being transformed, and there is a need for Japan and Western Europe to join forces with the United States in supporting the international economy. At the same time, while we are still far from achieving reductions in strategic nuclear weapons and conventional forces, resolving regional conflicts, and otherwise attaining the goal of peace and disarmament, there have been a number of significant international political developments, including the achievement of the U.S.-U.S.S.R. treaty late last year for abolishing INFs as a first step toward nuclear disarmament. Japan has a greater responsibility than ever before within this global current. It is imperative that Japan, as the world's second-largest economy, make the maximum contribution to foregoing a world economic order in the interests of world prosperity and promote world peace.

Here at home, we must emphasize not just material wealth but also spiritual affluence and seek to link the benefits of our economic growth to date to true affluence. It is in line with this thinking that I have been advocating furusato creation.

This effort to grapple with our various domestic and international issues might be rephrased as a quest for harmony and vigor. Seeking harmony between Japan and the rest of the world, working to rectify the various imbalances and inequities existing within Japan, and striving to build a more vigorous society-these are the issues that confront government today. Ordering the various policy issues that demand our immediate attention and the issues that demand long-term study bringing together the collective wisdom of people from all walks of life, I am determined to deal with these issues and to fulfill my popular mandate.

It will soon be 100 years since the establishment of parliamentary government in Japan in 1890. During these years, Japanese democracy has overcome many difficulties and achieved its present development with the great efforts of numerous leaders and the people. On the issue of reallocating the seats in the House of Representatives, which is a major issue before us, I hope all of the parties will fully discuss this in line with the resolution of the House of Representatives, and the administration intends to make every effort in keeping with those inter-party discussions.

Believing as I do that promoting the establishment of political ethics is an essential prerequisite for gaining popular trust in government, I will work for clean governmental and upright administration.

I would like next to state my basic policies on a number of policy areas based upon this approach.


Foreign Policy

The international climate today is still extremely fluid, fraught with numerous issues including the further stabilization of East-West relations, the solution of regional conflicts, sustained world economic growth, and stability and development in the developing countries. Within this context, it is important that Japan, aware of its position as a mainstay of the international order, actively play a larger role and accept larger responsibilities from the global perspective. It is especially essential that Japan, firmly maintaining its position as a nation of peace, make a larger contribution in the political, economic, cultural, and other spheres.

When I spoke with President Reagan and the other leaders during my recent visit to the United States, I stated frankly that Japan is playing a role and fulfilling responsibilities commensurate with its abilities from the global perspective. President Reagan and I talked about what Japan and the United States should join forces in doing for world peace and prosperity, and we reaffirmed our basic stance of working together to solve the issues between our two countries. Through these discussions, I believe we were able to further develop that Japan-United States relationship that is the cornerstone of Japanese foreign policy.

Hoping that further progress will be made on constructive dialogue between the U.S. and the U.S.S.R. so that the INF treaty may be followed by deep and balanced reductions in strategic nuclear forces and the solution of regional conflicts and other concerns for the further stabilization of East-West relations overall, we will strongly support U.S. foreign policy efforts to this end. I intend to appeal for further progress on effective efforts for disarmament at the third special session of the General Assembly devoted to disarmament to be convened this May and other forums. In addition, along with strengthening its efforts for the prompt resolution of other issues, be they the issue of the Iran-Iraq conflict, the issues of safe passage in the Persian Gulf and peace in the Middle East, or the problem of Cambodia, Japan will, as a non-permanent member of the United Nations Security Council, actively promote cooperation with the United Nations. I intend especially to make the utmost effort to further strengthen and expand our non-military contribution to United Nations and other peace-keeping activities.

International terrorism is a challenge to democracy and is absolutely unforgivable. The destruction of the Korean Air jetliner last November was truly deplorable, and the administration will actively promote international cooperation to combat terrorism.

In contributing to the international community in a variety of fields, it is important that Japan first work to ensure its own peace and security. Firmly maintaining the Japan-United States security arrangements, the administration will work to ensure their smooth and effective functioning and will work to build a moderate defense force under our peace Constitution, devoted exclusively to defense, not becoming a military power such as might threaten other countries, and firmly maintaining the three non-nuclear principles and the system of civilian control. Realizing that the major economic changes affecting Japan and the United States create sharp cost pressures on the stationing of U.S. armed forces in Japan, the administration intends to increase the Japanese share of these costs with an eye to seeking to maintain stable employment for workers at U.S. military facilities in Japan. Accordingly, a draft amending the Labor Cost Sharing Agreement between Japan and the United States will be submitted to this Session of the National Diet for deliberation.

On economic cooperation, the international community is increasingly calling for Japan to make a more active contribution for the maintenance of the international economic order in light of its major responsibilities.

It is extremely important terms of our global contribution that, maintaining free-trade arrangements, Japan ensure that its markets are open and that other countries have access to these markets, and this is also the path of development for Japan as a trading country. The administration is thus ambitiously pursuing economic restructuring and is succeeding in this field, and, along with endeavoring to actively promote the GATT Uruguay Round, we intend to ensure that the pattern of domestic-demand-led economic growth takes hold in Japan and to implement a variety of measures for actively promoting imports, improving market access, deregulating, and more, to make every effort to reduce external imbalances, and hence to make the Japanese economy more in harmony with the world economy.

With all due heed to promoting the sound and harmonious development of Japanese agriculture, we will deal with the agricultural trade issue appropriately with full consideration for agriculture's place in the GATT Uruguay Round negotiations.

With a priority attention to economic cooperation, the administration as well as expanding official development assistance as by ambitiously seeking the prompt attainment of the Third Medium-term Target, will work for the smooth recycling of capital to the developing countries.

Nor is Japan's role limited to these political and economic aspects. We will, along with promoting international contacts in science and technology, education, culture, sports, and the entire range of interests, work to preserve the global environment. Grassroots diplomacy thinking of the world as the shared furusato for all humankind is needed to promote down-to-earth internationalization in the everyday life of each and every Japanese. This means promoting the enhancement of provisions for accepting foreign exchange students and young researchers from overseas, expanding the invitational Japan Exchange and Teaching Program for young people, implementing the Ship for World Youth program, and more.

With this in mind, I intend to deploy foreign policy based upon our basic position as both a member of the Western community of nations and an Asian-Pacific country.

It is planned that the Economic Summit of Industrialized Nations will be held this June in Toronto, and I intend to make every effort at this Summit both for the United States and the other Western industrialized democracies to further strengthen their solidarity and for further economic policy coordination to promote the harmonious development of the world economy. During my recent visit to Canada, I reaffirmed our cooperation to this end in my discussions with Prime Minister Mulroney and we agreed on further promoting Japan-Canada relations.

Like Japan and the countries of North America, the West European countries bear an important responsibility for world peace and prosperity, and cooperation with these countries is an important pillar of Japanese foreign policy. Building upon the strong West European interest in Japan, I will work to give added breadth and depth to the cooperative relations between Japan and Europe in the political, economic, cultural, and other fields.

The Asia-Pacific region is increasingly important as Japan makes its international contribution from a global perspective. As my first overseas visit after assuming the office of Prime Minister, I visited the Philippines, held a summit meeting with the ASEAN leaders, announced the ASEAN-Japan Development Fund of not less than $2 billion, and indicated our positive stance on cooperation with ASEAN.

Along with further developing the friendly and cooperative relations between Japan and the Republic of Korea, we will make every possible effort for the creation of a climate conducive to the relaxation of tensions on the Korean Peninsula. To this end, we intend to cooperate closely with President-elect Roh Tae Woo who will be inaugurated in February. It is most gratifying that the outlook is for the Seoul Olympics this fall to be held with the participation of the United States, China, the Soviet Union, and a record number of countries from throughout the world, and Japan will extend every cooperation for the success of the Olympic Games.

Maintaining and developing good and long-term stable relations with China is a central pillar of Japanese foreign policy, and the administration, continuing in keeping with the Japan-China Joint Communique and the principles governing our relations; will work to further strengthen these friendly relations. This year marks the tenth anniversary of the conclusion of the Japan-China Treaty of Peace and Friendship, and, achieving dialogue between the two countries at the highest level, we intend to work to enhance mutual understanding and mutual trust.

We will also further strengthen the relations of friendship and cooperation with Australia, New Zealand, and the other Pacific countries.

It has consistently been our basic policy in our relations with the Soviet Union to establish stable relations based upon true mutual understanding through resolving the Northern Territories issue and concluding a peace treaty, and the administration intends to work for a breakthrough in Japanese-Soviet relations and the establishment of good-neighborly and friendly relations consistent with this policy.


Economic and Fiscal Management

The Japanese economy is in an expansionary phase, domestic demand firm, corporate earnings up, and the employment picture improved. At the same time, the global economy is enjoying slow but sustained expansion, but there are still many problems remaining, including the American fiscal deficit, the external imbalance among Japan and the other leading countries, and the debts bedeviling the developing countries. Appreciating the fact that the United States is continuing to work to reduce its fiscal deficit and to make other improvements, Japan will continue to promote concerted economic policies among the leading nations. We will also continue to strive for steady expansion led by domestic demand growth on a basis of price stability and to work for appropriate and flexible economic management in order to achieve sustained and stable growth.

To this end, the draft budget for fiscal 1988 shows a strong 20% growth over the initial budget for fiscal 1987 in general public works spending, and it is responsive to the Japanese and worldwide calls for an expansion of domestic demand.

On the stabilization of currency markets, the leading countries have been cooperating in markets in line with the G-7 statement of late last year, and the Joint Communique that President Reagan and I issued during my recent trip to the United States included a statement reaffirming our understanding that any further decline in the dollar would be counterproductive for the world economy. The administration will continue to work for the stabilization of exchange markets through policy coordination and market cooperation.

Seeking to link the benefits of Japan's economic growth to improved standards of living for the Japanese people, the administration will further promote efforts to see that the benefits of the yen's appreciation are passed along to consumers.

With the yen's appreciation and other dramatic changes in the Japanese and international economies, the economic situation remains harsh and the employment outlook grim for some industries and regions.

The administration, continuing to implement measures to promote the smooth transformation of the industrial structure, will continue to forcefully promote the development of new fields and other restructuring policies so that small businesses faced with harsh environmental changes can respond positively and achieve sound development.

With the changes in the industrial structure, the aging of the labor force, and other developments, the administration will forcefully promote its comprehensive industrial, regional, and elderly employment project program and other policies for an appropriate response to employment issues. We will also promote the shortening of working hours, improved health measures for workers, and other policy measures.

Along with establishing agriculture as an industry able to respond to the harsh situation in Japan and overseas and to stand on its own two feet, we will work to ensure the best farmers for the future, to improve the production infrastructure, to improve agricultural technologies, and to enhance and strengthen other policies in line with the recommendations of the Agricultural Policy Council so as to enable agriculture to achieve the maximum productivity improvements in keeping with the given land constraints and to provide stable supplies of foodstuffs at popularly acceptable prices and will work to revitalize rural areas.

At the same time, we will also continue steadfastly to pursue policies to ensure stable supplies of energy.

If we are to cope with such issues as enhancing the quality the people's lives, revitalizing local communities, contributing to the international community, and resolving the economic friction and to further enhance the Japanese economy toward the 21st century, it is imperative that we clarify the medium- and long-term economic management policies based upon the outlook for the Japanese and world economies and give the people and companies renewed confidence and vitality. From this perspective, I asked the Economic Council last November to draw up a new economic plan based upon the effort to promote economic restructuring more forcefully and to accelerate and consolidate the shift to domestic-demand-led economic growth. I intend to announce medium- and long-term economic management policies soon in keeping with the Economic Council's deliberations.

On fiscal policy, it is imperative that we restore fiscal responsiveness as soon as possible so as not to bequeath an excessive burden to future generations. Accordingly, in drawing up the fiscal 1988 budget bill, by clamping down harshly on general expenditures on the expenditures side, it was possible to hold the value of deficit-financing national bonds to \1.83 trillion less than the initial budget for fiscal 1987 and to reduce the dependence on deficit-financing bonds to 15.6%. Thus the fiscal 1988 budget bill represents solid progress toward fiscal reform, and it is possible with the use of proceeds from the sale of NTT stock, one of the benefits of administrative and fiscal reform to respond to the calls in Japan and overseas for the stimulation of domestic demand.

However, the value outstanding of deficit-financing government bonds issued as of the end of fiscal 1988 is still expected to be \159 trillion, and the fiscal situation is still harsh. Accordingly, we must not let up and must continue to forcefully promote fiscal reform.

Likewise with local government finances, we will take the necessary measures and contribute to their smooth functioning.

Administrative reform is an issue that cannot be avoided if we are to respond properly to the changes in the Japanese and international environment as they affect administration and to build a vigorous economy and society in preparation for the 21st century. Along with continuing to forcefully promote administrative reform, and I put together the outlines of reform late last year centering on streamlining and rationalizing the administrative structure, trimming the civil service personnel rolls, and implementing the other reforms for fiscal 1988. We will work to steadfastly give these policies concrete form. Moreover, I intend to promote a cheerful-service campaign to make each and every person who comes into contact with the public in administrative agencies and elsewhere more keenly aware of the need to improve administrative service, to conduct an overall review of the way things are done, to provide attentive and considerate administration from the popular perspective, and to provide administration with a heart.

Along with promoting strengthened autonomy and independence for local governments, I will also encourage independent and comprehensive administrative reform by local governments.

In thinking of the advent of the aged society and the further internationalization of our economy and society, the achievement of radical tax reform is one of the most important issues for Japan, and it is necessary to eliminate the national perceptions of tax inequities and to promptly achieve a stable tax structure balancing among income, consumption, asset, and other taxes.

Realizing this, I am asking the Tax Commission to conduct vigorous deliberations on the total shape of fundamental tax reforms and, along with getting full input from people in all walks of life through such forums and putting together a draft for radical tax reform that the people can accept, I intend to devote myself body and soul to achieving these reforms.


Balanced National Development

The riches of nature and a comfortable urban environment, communities where people know and identify with each other, neighborhood-building, community-building, and city-building based upon the initiative of the people, and the warmth of the family home-these are just some of the things that underlie my policies. In that sense, promoting the reinvigoration of local communities rests to a considerable extent on everyone's acting to foster and defend the furusato. For its part, the government will ambitiously implement a range of policies for balanced national development, including improving the urban environment, supporting the supply of quality housing and neighborhood creation, and conserving the natural environment so that these efforts can have the best effect. At the same time, we are hard at work on preparations for the International Garden and Greenery Exposition scheduled to be held in 1990.

On deterring the recent surge in land prices in major urban and other areas, the administration has put together the Outline of the Emergency Land Measures in line with the recommendations of the Special Advisory Council on the Enforcement of Administrative Reform and is now working to steadfastly promote these measures to normalize land dealings, promote the supply of houses and building sites, and effect other improvements. Furthermore, we intend to contribute to preventing the high land prices from having a ripple effect, promoting the supply of building sites, and otherwise containing this problem in the fiscal 1988 tax reform policies through reviewing the provisions as they apply to the taxation of profits from the sale of real estate, including the abolition in principle of the special exemption on capital gains for people selling their homes to buy other homes. Happily, there is evidence that these rampant land prices are coming down in downtown Tokyo and other areas, but the Special Advisory Council on the Enforcement of Administrative Reform is conducting a fundamental and wide-ranging study of land issues and other problems. Special committees have been established in the Diet and are vigorously deliberating these issues, and a number of resolutions and other recommendations have been put forth. In line with these deliberations, the administration will continue to work for the achievement of appropriate and rational land use and the formation of appropriate land prices by working for the formation of a national consensus.

One of the causes of these soaring land prices is that there has been an over-concentration of population and functions in Tokyo. Steadfastly promoting the Fourth Comprehensive National Development Plan and otherwise, the administration will work to relieve the over-dependence on Tokyo by dispersing urban and industrial functions to non-Tokyo areas.

Consistent with these policies, we are promoting the relocation of governmental and other functions to non-Tokyo locales, and have recently decided upon the policies for this relocation. We are thus making a determined effort to have each ministry or agency relocate one function.

The Fourth Comprehensive National Development Plan is based upon community creation built around the creativity and ingenuity of the local area and seeks to create a more decentralized pattern of national land use through promoting the exchange network concept designed to improve the infrastructure of transportation, information, and communications systems and to enhance the contact-promoting software aspects, and the same basic thinking underlies my furusato creation concept as underlies this national land use program. This year marks the first year of the Fourth Comprehensive National Development Plan's implementation, and, intending to comprehensively and forcefully promote the many policy measures included in this Plan with the cooperation and participation of not only the national government but also local governments, non-governmental organizations, and a wide range of other groups, we are now readying the relevant legislation as part of this effort.

We will also continue to ambitiously promote measures for comprehensive development in Hokkaido and Okinawa.

As well as gaining the cooperation of the people and striving to quell terrorist and guerrilla incidents that create widespread public anxiety, to maintain the legal order, and to quash and prosecute crime, we will work to create a nation that is resilient in the face of accidents and natural disasters, a society where the people trust each other and are rewarded for their honest labors, and a society where the people can live anxiety-free lives.


An Affluent Society

The Japanese people are among the longest-lived in the world, and we are approaching an era in which the average life span is 80 years. Looking ahead to the coming of the full-fledged aged society and seeking to establish a fair and stable social security system, we will, along with conducting a stabilizing and strengthening review of the national health insurance system, make further efforts for the unification of health insurance and public pension plans. We will also work for the development and popularization of corporate pension plans for more comfortable lives for the elderly. So that each and every Japanese can live a stress-free and worthwhile life, we will, along with promoting health-building systems, work to enhance the health and medical services for the elderly, expand the availability of home health and welfare services, improve special nursing homes for the aged, and more. Along with devoting every effort to conquer cancer, AIDS, and other intractable diseases, we will also promote mental health measures, social rehabilitation for people needing psychiatric care, and other measures for psychological well-being.

Along with carefully considering the needs of the handicapped, fatherless homes, and other socially disadvantaged people, we will implement comprehensive and ambitious measures to enable women to use their talents to the fullest and to contribute to society's development on an equal footing with men.

The promotion of educational reform is an important national policy issue that deserves all of our energies so that Japan can develop as a vigorous and cultural state looking ahead to the 21st century and can lay the foundations for contributing to the international community.

I believe that what we need most from today's education is that it foster individualistic young people rich at heart who, aware of themselves as Japanese, are able to play a vigorous role in the international community. Seeking to achieve creative and diverse education giving full rein to each child's personality, I am moving steadily to implement the recommendations of the Provisional National Council on Educational Reform for emphasizing moral education, improving the quality of teachers, reforming the university entrance system, and more, and I am therefore promoting policy measures to this end, including the possible submission of new legislation.

The state has an important responsibility to promote the sound development of its young people. Enhancing education not only in the school but also in the family and community, I will also seek to expand the opportunities for young people to be at one with the great outdoors as well as heritage understanding promotion, local volunteer activities, and other community programs for young people.

I will also seek to enhance measures for the promotion of lifelong education and the development of academic studies and culture.

There is increasing popular interest in leading full and healthful lives, and the administration is promoting measures so that people can continue to enjoy sports all of their lives. This year being an Olympic year, I will work especially to enhance systematic policy measures so that Japanese athletes can perform at top potential in international competitions.

The fact that Dr. Susumu Tonegawa was awarded the Nobel Prize in physiology or medicine last year was something to gladden the hearts of all Japanese. The administration will work even harder to promote academic research. Likewise, with the advances being made in superconductivity and on other scientific and technological frontiers, we will ambitiously promote basic creative scientific research to unlock the future, including international cooperation in this field.



These, then, are my policies on the important issues facing us in Japan and worldwide.

With the rapid changes taking place today, I would like to express my appreciation for the great efforts of the many people who laid the foundations for today's prosperity and my sincere respects for the wise and diligent efforts of the people. Never forgetting my youthful determination, I intend to move forward forcefully seeking the creation of a Japan balanced in both the material and spiritual aspects and an open society where people feel truly affluent.

In putting forth its position as a nation dedicated to peace and determined to contribute to a better world, there may be times when Japan will also have to share in the pain. In that sense, domestic policy and foreign policy are truly one. Seeking the agreement of the people, I intend to move forward with principled and responsible action in good-faith and tireless effort to deal with the many problems crying for a solution.

Praying from the heart for the happiness and prosperity of all of the people, I am determined to devote my every effort to moving forward in the quest for harmony and vigor.

In this, I ask for the understanding and cooperation of all of the people.


(2) Foreign Policy Speech by Minister for Foreign Affairs Sousuke Uno to the 112th Session of the National Diet

(January 25, 1988)


I would like, at the resumption of this 112th Session of the National Diet, to express my views on Japan's basic foreign policy.



As seen in the recent summit meeting between the United States and the Soviet Union, and especially in the treaty that was signed for the elimination of intermediate-range nuclear forces, East-West relations have recently taken a welcome turn for the better. However, conflict and turmoil continue throughout the world, and the international situation remains unstable overall.

In the world economic outlook too, while there is cause for hope in the fact that the industrialized countries are maintaining sustained, albeit gradual, growth, the instability in currency and stock markets, the major current account imbalances, the rising tide of protectionist pressures, the debt problem, and other serious concerns make it impossible to be entirely optimistic about the future.


Contributing to Peace and Cooperating Internationally for Prosperity

Within this fluid international situation, Japan has become an important member of the international community with a major impact on world trends. Not blessed with resources of its own, this small country with only 1/360 of the world's land area and only about 1/40 of the world's population now accounts for well over 10% of world GNP and is one of the world's richest nations in terms of per-capita national income. Resource-poor, Japan has come this far by wasting not a single dump of resources or a single drop of oil and by working unwaveringly on technological innovation and managerial improvements. I have nothing but praise for these untiring efforts by the Japanese people. At the same time, we must not forget that other countries have helped by providing us with foodstuffs and other natural resources and that we have been blessed with a favorable international environment including national security guarantees and free trade.

Having gained this position of prominence in the international community, Japan has a responsibility to take the initiative and to accept that it must contribute to international peace and prosperity, and this is the only way that Japan can ensure its own peace and prosperity.

Based upon this conviction and keenly aware of the awesome responsibilities of Japan's foreign policy mission, I am determined to embark upon a bold and active foreign policy designed to ensure that Japan is open to the world and contributes to the world's well-being.


East-West Relations and Solidarity among the Western Industrialized Democracies

The stark fact that world peace is today maintained by the balance of power and deterrence should hardly need to be pointed out anew. It is imperative that, maintaining the deterrent forces needed to keep the peace, the Western industrialized democracies promote dialogue and negotiations with the Soviet Union and the other East-bloc countries and seek to put East-West relations on a firmer basis of mutual trust. I have the highest regard for the agreement on the global elimination of intermediate-range nuclear forces reached at the recent summit meeting between the United States and the Soviet Union, as long advocated by Japan and as a result of the Western solidarity as confirmed at the 1983 Williamsburg Summit, and I heartily welcome this treaty as a first step to nuclear disarmament. In addition to strategic nuclear weapons and other arms control and disarmament issues, it is also important that solutions be found to regional conflicts in Afghanistan and elsewhere and to human rights issues and other problem areas. I hope that substantive progress will be made in these areas and an effort made to stabilize the whole of East-West relations. To that end, Japan must continue supporting the efforts of the United States as a member of the Western camp. At the same time, Japan will continue to make every effort in the third special session of the General Assembly devoted to disarmament to be convened at the end of May and other forums to further promote international efforts for substantive progress in disarmament and to lower the level of armaments step by step in balance.

Friendly relations with the United States based upon the Japan-U.S. security arrangements are the cornerstone of Japanese foreign policy. Firmly maintaining these security arrangements, the administration intends to continue working for their smoother and more effective implementation. Realizing that the major economic changes affecting Japan and the United States create sharp cost pressures on the stationing of U.S. armed forces in Japan, the administration intends to increase the Japanese share of these costs with an eye to seeking to maintain stable employment for workers at U.S. military facilities in Japan and hence ensuring the effective operation of U.S. armed forces in Japan. Accordingly, a draft amending the Labor Cost Sharing Agreement between Japan and the United States will be submitted to this Session of the National Diet for deliberation.

Prime Minister Takeshita recently visited the United States and held very fruitful discussions with President Reagan. The two leaders were agreed on the need for making the Japan-U.S. relationship, which is now of vital global importance, unshakable and for both countries to cooperate further in joining forces in the cause of world peace and prosperity. The two leaders also confirmed that the bilateral issues between Japan and the United States should be solved in a realistic manner, one by one, through joint efforts by both sides.

It is most significant that these talks at the highest level have laid the groundwork for the management of the Japan-U.S. relationship. In Washington myself, I met with Secretary of State Schultz and Secretary of Defense Carlucci and had frank exchanges of views on the international situation, bilateral issues, and the smoother functioning of the security arrangements.

From the United States, the Prime Minister traveled to Canada and held talks at the highest level there. It was significant that the two leaders reached significant agreements on cooperating to make the upcoming Toronto Summit a success and on promoting cooperation and exchanges in a wide range of fields to further promote the cooperative relations between Japan and Canada.

The countries of West Europe today play a vital role, along with the countries of North America, in supporting the international economic and political order, and it is very important for Japan's own prosperity and stability that we promote close solidarity and coordination with these countries. My discussion with British Foreign Secretary Howe when he was in Japan recently raised the curtain on a dynamic Japanese-British partnership, and I also had a frank exchange of views with EC Commission member de Clercq. I intend to continue to actively promote such dialogue with the countries of Western Europe and to further strengthen Japan-Europe relations in a wide range of political, cultural, and other fields.

In relations with the Soviet Union, it is hoped that East-West relations overall will see further constructive progress and that this progress will be reflected in Japanese-Soviet relations as well, but the present relationship is still grim with the Soviet military buildup in the Far East, in addition to the unresolved status of the Northern Territories. Japan hopes to effect an improvement in the relationship with efforts on both sides. Efforts for further strengthening and expanding the bilateral political dialogue and enhancing mutual understanding, including the prompt holding of the Japan-U.S.S.R. Foreign Ministers' Consultations soon, are important in this context. It is Japan's unshakable policy to establish stable relations with the Soviet Union based upon mutual understanding through resolving the Northern Territories issue and concluding a peace treaty, and we will continue to work tenaciously for the reversion of all of the Northern Territories.

Realizing that dialogue with the countries of Eastern Europe is an increasingly important part of the overall East-West relationship, I intend to further promote political dialogue and economic and cultural contacts with these countries in full awareness of each country's special conditions and policies.


Friendly and Cooperative Relations with the Asian-Pacific Countries

As an Asian-Pacific country, Japan has made the promotion of friendly and cooperative relations with the other countries of the region an important pillar of its foreign policy, and, respecting each country's own historical and cultural identity to the fullest, we intend to continue contributing positively to the peace and development of the region.

Accompanying Prime Minister Takeshita to Manila last month, I took part in the Japan-ASEAN Summit Meeting. Prime Minister Takeshita emphasized anew that Japan rejects becoming a military power and intends to contribute to world peace and prosperity, and this stance and approach were, along with the positive measures for ASEAN that were announced at this Meeting, held in high regard both in Japan and overseas. Japan intends to continue to work to further strengthen its friendly and cooperative relations with the ASEAN countries based upon the strengthened relationship of trust at the highest level as established at this Meeting. During the official visit to the Philippines that followed the Japan-ASEAN Summit Meeting, Prime Minister Takeshita reaffirmed anew to President Aquino that Japan intends to render every possible support for Philippine efforts at democratic nation-building.

On the issue of Cambodia, Japan intends to support the determined efforts of Prince Sihanouk for a political solution built around the withdrawal of Vietnamese forces and the attainment of self-determination for the Cambodian people to contribute positively to an early solution.

In the Republic of Korea, the Democratic Justice Party's President Roh Tae Woo was elected in last month's presidential election and a transfer of authority is scheduled to take place in February. I would like to pay my respects once more to the fact that the Republic of Korea has, with the constructive efforts of the Korean people, succeeded in amending its Constitution and effecting other reforms and is moving still more firmly on the democratic road. Japan believes that it is increasingly important to continue to develop friendly and cooperative relations between Japan and the Republic of Korea based upon a more stable popular foundation. The United States, China, the Soviet Union, and a large number of other countries have announced that they intend to take part in the Olympic Games to be held this September in Seoul, and I sincerely welcome this development. Japan intends to continue to render every possible cooperation for the success of the Seoul Olympics and the relaxation of tensions on the Korean Peninsula.

The maintenance and development of friendly and cooperative relations with China is also important for the peace and stability of Asia and all the world. Under its reform and open policy, China is moving ahead boldly with reforms of its economic and political structures. Holding these Chinese efforts for modernization in high regard, Japan will do everything it can to support them. Japan intends to work for the further development of our bilateral relationship in line with the Japan-China Joint Communique, the Treaty of Peace and Friendship, and the four principles governing Japan-China relations. This year marks the tenth anniversary of the conclusion of the Treaty of Peace and Friendship, and I intend to strive ambitiously to further the mutual understanding and trust between our two countries, including dialogue at the highest level.

There have recently been active exchanges of visits with India, Pakistan, and the other South Asian nations, and Japan's relations with these countries are quickly drawing much closer. In this region, the South Asian Association for Regional Cooperation is now fully operational and intra-regional cooperation is on the rise. Japan intends to continue cooperating for stability and economic development in this region.

In our relations with the Oceanic countries, we are further expanding and strengthening friendly and cooperative relations with Australia and New Zealand. At the same time, we intend to promote further economic cooperation for the peace and development of the Pacific island countries and to strengthen our relations with these countries that have become increasingly important in recent years.

This administration will actively support Pacific cooperation aimed at balanced development for the entire Asian-Pacific region.


Relations with the Middle East

The situation in the Middle East continues to be fluid.

On the Iran-Iraq conflict and the issue of safe passage in the Persian Gulf, Japan is, along with continuing its candid political discussions with the principals to the conflict, working to promptly implement the measures decided upon last October to secure safe passage in the Gulf. In keeping with Japan's position as a non-permanent member of the United Nations Security Council, Japan will continue to work, in consultation with the countries concerned and with the United Nations Secretary General, for a peaceful settlement of the conflict based upon United Nations Security Council Resolution 598. Consistent with these efforts, I have invited the Iranian Foreign Minister to Japan for cordial discussions and sent a special envoy to the Iraqi Foreign Minister and have appealed strongly to these two countries to respect the United Nations Resolution.

On the issue of peace in the Middle East, in light of the recent turmoil in the Israeli-occupied West Bank and Gaza Strip, Japan strongly hopes that progress will be made in holding an international conference and in other efforts for peace, and we intend to make all due efforts to contribute to this end, including appeals to the parties concerned.

It is most regrettable that the Soviet military intervention in Afghanistan has continued for more than eight years. Calling for the prompt realization of a political settlement including the complete withdrawal of Soviet forces, Japan supports the mediation efforts of the United Nations.


Relations with Latin America and Africa

For the countries of Latin America, facing as they are debt problems and other economic difficulties, Japan intends to facilitate the recycling of capital, to expand its economic and technical cooperation, and to expand trade and investment to support the self-help efforts of these countries to promote and consolidate economic reconstruction and democratization.

Continuing to support the intra-regional efforts for peace in Central America, Japan intends to support Central America's economic development. Likewise, with the dawning of true peace in Central America, Japan intends to render every possible support to this region for reconstruction and redevelopment.

The African countries continue to face severe economic difficulties, including critical food shortages in some countries, and Japan intends to positively support the African countries' self-help efforts, including the implementation of its program for approximately $500 million in non-project type grant assistance for the sub-Saharan African countries.

Resolutely opposed to South Africa's apartheid policies of racial segregation, Japan has instituted a number of restrictive measures against South Africa. We intend to continue our efforts in cooperation with the international community for the peaceful solution of this issue. At the same time, we are stepping up our humanitarian assistance to apartheid's victims and our economic cooperation with neighboring countries.


Contributing to the Sound Development of the World Economy

Even as the major industrial countries continue to promote economic restructuring, it is indispensable to sustaining world economic growth, rectifying external imbalances, and stabilizing currency markets that they further strengthen their macroeconomic policy coordination. It is especially important that Japan, with its massive current account surplus, actively promote the expansion of domestic demand, further improve market access, recycle funds to the developing countries, and otherwise continued to contribute to the world economy and that we make every effort to reduce our external imbalances.

In international trade, the need has arisen to further strengthen and improve the GATT regime and to expand the scope of its application. The Uruguay Round negotiations are underway to this end, and Japan is determined to work in coordination with the other nations for the attainment of our shared goal of maintaining and strengthening the free-trade arrangements. It is imperative, in part to demonstrate both in Japan and overseas that the negotiations are making concrete progress, that we work for early agreements in the more feasible areas. In these wide-ranging negotiations, it may be necessary for all countries to review the issues and to reform their basic economic structures. Sharing the pain at home and abroad, Japan is determined to work actively for world economic coordination, and we are confident that this is in Japan's own long-term interests. It is no exaggeration in that sense to say that never before has the intrinsic integrity of domestic and foreign policy been more obvious.


Cooperating for the Stability and Development of the Developing Countries

Cooperating with the developing countries as they grapple with their economic difficulties is an important part of Japan's international contribution. Japan is working to expand and enhance its Official Development Assistance (ODA) under the Third Medium-term Target, and the fiscal 1988 general ODA draft budget includes a 6.5% increase over the previous year.

As seen in the debt problems, the low commodity prices, and other difficulties, the developing countries face a harsh economic climate, and the disparity between the developed North and the developing South is widening. Accordingly, Japan has sought to respond more flexibly to the developing countries' diverse needs as with the further expansion of our international emergency assistance arrangements, the provision of ODA loans in support of the developing countries' economic policies, the enhancement of the non-project type grant assistance that l referred to earlier, and the expansion of their local cost financing. Along with enhancing our assistance to the developing countries both qualitatively and quantitatively, Japan intends to continue to contribute positively to promoting constructive North-South dialogue in the United Nations and other forums.

Likewise, Japan will continue to be unstinting in responding to the refugee problems throughout the world, including providing financial and food assistance and accepting Indochinese refugees.


Cooperation with the United Nations

The United Nations is the only universal international organization working to keep the peace, to protect human rights, to enhance human welfare, and otherwise to improve the human condition, and the United Nations has an increasingly important role to play in political, economic, social, and other fields for building an international order consistent with the shared interests of all mankind.

Ever since joining the United Nations, Japan has emphasized the United Nations in its policies, and we intend to further strengthen our international cooperation through the United Nations. In the political sphere, Japan is making diplomatic efforts to maintain international peace and security consistent with its important responsibilities as a nonpermanent member of the Security Council. We also intend to make intensive efforts to further strengthen and enhance Japan's non-military contribution to United Nations and other peace-keeping activities.


Preventing International Terrorism and Enhancing the Security and Welfare of Japanese Nationals Overseas

The destruction of the Korean Air jetliner last November was a most deplorable act, and such terrorist actions should be roundly condemned. At the same time, our concern for the safety of Japanese nationals overseas makes it impossible to overlook the recent spate of vicious terrorist incidents worldwide. Resolutely opposed to terrorism in all its forms, the administration intends to promote international cooperation for the prevention of terrorism. At the same time, we will also enhance the arrangements to protect Japanese nationals overseas.



As explained, if Japan is to be truly open to the rest of the international community in fact as well as in name, it is imperative that we contribute to international peace and stability and cooperate positively for the sustained development of the international economy. However, that alone is not enough. As the peoples of the world strive to create a civilization that is not simply wealthy in material ways but is also spiritually rich, there is considerable interest in what Japan itself can contribute in the historical context. Since becoming Minister for Foreign Affairs, I have been made acutely aware of Japan's importance in the international community. The other nations have great expectations of Japan, and it is hoped that Japan will contribute to a better world in line with these expectations. Indeed, it might be said that we have entered a new era in which the world looks to Japan not just for material goods but for considered and compassionate responses.

In this sense, the time has come for the Japanese public and private sectors to join hands in creative cultural, academic, and scientific undertakings and in promoting global exchanges. Interpersonal exchanges are especially important in enabling people to get to know each other, and the administration will strengthen its youth exchanges, student exchanges, the invitational Japan Exchange and Teaching Program for young people begun last year, and a wide range of other exchanges. These efforts should not be limited to the national government but should involve each and every Japanese national. I therefore intend to gain the understanding and cooperation of local governments and private-sector organizations in further promoting these international exchanges.

I intend to enable the Japanese foreign policy establishment to respond more positively and more flexibly by further strengthening and enhancing the diplomatic establishment to respond to the multitude of important issues that Japan faces today.

The new century is just around the corner. Looking ahead, we must devote ourselves as a nation to making Japan a country that is truly open to the rest of the world and contributes to a better world. In this I am asking for the unstinting support of all of the people and my fellow Diet members.


(3) Policy Speech by Prime Minister Noboru Takeshita to the 113th Extraordinary Session of the National Diet

(July 29, 1988)


I would like, at the opening of this 113th Extraordinary Session of the National Diet, to say a few words on my policies and to ask the understanding and support of the people for these policies.

Before that, however, I would be remiss were I not to express my heartfelt sympathies to the people who perished in the July 23 collision between a ship from the Maritime Self-Defense Forces and a commercial vessel as well as to thier bereaved families and to extend my sincere wishes for a speedy recovery to those who were injured in this accident. I assure you the government is continuing to make every effort in the search for the one person who is still missing.

It is most regrettable that such an accident should have occurred, and the government is determind to uncover the causes and to do everything possible to see that there is no repetition of this tragedy.

In a similar vein, my sincere thoughts go out to all of those people who have suffered from the heavy rains that have fallen in Western Japan, and the administration will further step up its efforts to prevent such natural disasters.

Since becoming Prime Minister last November, I have engaged actively in summit diplomacy, meeting with the numerous dignitaries visiting Japan and making seven trips overseas to a total of 12 countries. Throughout, I have consistently stressed the concept of Japan contributing to the world and have advocated my International Cooperation Initiative composed of the three pillars of cooperating for peace, strengthening international cultural exchanges, and enhancing official development assistance.

This advocacy has been received with understanding and agreement, and I intend to continue to develop our foreign policy on this basis and to make every effort to give the Initiative concrete expression.

In seeking to implement these policies, the first imperative is that Japan itself stand on a firm footing. I am thus keenly aware that, at least in that sense, domestic policy and foreign policy are truly two different sides of the same coin.

I have long called for "the politics of furusato creation," by which I mean the need to build the social, cultural, and economic foundations so that people in every region can proudly identify with their communities.

The future demands bold and daring government able not only to restructure the industrial and economic structures but able to work a wide range of reforms extending even to traditional systems and institutions. Yet believe it will be possible through such efforts to create a Japan able to respond to the international community's expectations and a truly affluent land which the Japanese of the future can be proud to call their own.

Looking to the Japan of the future, I believe it is important that we strive to create a fair and vigorous society, a society in which hard work is rewarded, and a society of hope, happiness, and human respect.

I believe that we should always be mindful of political ethics and self-discipline in government service so as to meet the people's expectations and trust, and it is imperative that we continually fulfill our responsibilities without even a hint of impropriety.


Tax Reform

The most important domestic issue before us today is that of effecting fundamental reform of the tax system.

I have continually appealed to the people on the need for tax reform, and it was with the hope that the members of the Diet, the people's representatives, could debate this issue in full that I have asked for this Extraordinary Session of the Diet to be convened.

Japan's economy and society have undergone striking changes. As the industrial and employment structures have changed and the people's income levels have risen, so has there been a progressive equalization. Economic transactions have become international the population is growing older, consumption is more individualized, and services now account for a greater proportion of consumption. If we are to respond to these changes and to build a future in which Japan can fulfill its responsibilities as a member of the international, community and all of the people can live in peace and comfort, I am convinced that now is the time for us to come to grips with this issue of tax reform

Its basic outlines formulated in the Shoup recommendations nearly 40 years ago, the present tax system is unable to adequately meet the demands of today's economic and social realities. For example, the tax burden is skewed toward direct taxation, especially taxes on salary income, and consumption taxes account for a sharply declining percentage, such that the people have an increasing sense of being overly and unfairly taxed. Likewise, there are a number of ways in which the present indirect tax system, heavily taxing certain goods and services as it does, does not accord with actual consumption patterns or other realities.

In looking at the state of the tax system, there is an urgent need to rectify these distortions and to institute a new tax system that is fair, simple, and acceptable to the people. Realizing this, the administration has submitted six tax reform bills to the Diet in line with the results of the lively deliberations in the Tax Commission and other input.

These reforms embody a fundamental overhaul of the tax system in keeping with the principles of equalizing the burden, making taxes economically neutral, and simplifying the tax system in the basic realization that all of the people should equitably share in bearing the common social costs.

The basic thrust of these reforms is that of creating a tax structure that the taxpayers can feel is fair through striking a balance among income, consumption, and assets taxes as by reducing taxes on income, seeking to tax consumption broadly and lightly, and adjusting the tax burden on assets.

Along with dramatic tax reduction to lighten the income and residence tax burden on middle- and lower-income families by widening the minimum tax rate bracket and increasing personal deductions, an effort is being made to reduce corporate tax levels from the international perspective and to lighten and rationalize inheritance taxes in consideration of the spouse's position. As a result, the total value of these tax cuts is some \5.6 trillion - an unprecedented amount. The necessary legislation has recently been enacted for these tax cuts in fiscal 1988, and the administration intends to work for their prompt and smooth implementation.

These reforms are also intended to fundamentally overhaul the present system of item-specific indirect taxes as by eliminating excise taxes and to institute a new consumption tax that will be simple, slight, and economically neutral.

With these reforms, we hope to achieve overall net tax reductions well in excess of \2 trillion.

While the administration is making every effort to improve the tax system as by reviewing securities trading profit taxes and the special tax treatment accorded medical fees paid from social insurance plans, we intend to continue the search for further improvements. We will also, of course, continue to work to ensure that tax administration is fair and just.

As I myself stated in the previous Session of the Diet, it is true that the people have expressed a variety of concerns on the enactment of a consumption tax. The consumption tax that is being proposed has been designed, after searching and honest reflection on the reasons why last year's sales tax bills were rejected, to respect commercial practices and to consider the clerical burden on taxpayers. Special consideration has been given to the circumstances facing small business.

Likewise, we have made every effort to hold the tax rate for the new consumption tax as low as possible at 3%. In addition, careful fiscal policy consideration has been exercised to help those who truly need help in light of tax reform's impact.

In implementing this consumption tax, it is important that the tax burden be passed along smoothly and justly, and the administration will work to create the right environment for this. In so doing, care will be taken to see that there are no price increases of convenience, and at the same time we will closely monitor the abolition of excise and other taxes to see that prices come down as they should.

The administration is confident that it will be possible, with the fundamental reforms of the tax system that are being proposed, to create the kind of fairer tax system we need to attain rewarding lives for all our people throughout their long lives within a caring welfare society while maintaining Japan's economic and social vigor and responding to internationalization. I am determined to move ahead resolutely with this.

Administrative and fiscal reform and tax reform are both indispensable if Japan is to move confidently into the new age, and they may thus be likened to the two wings of a bird.

Along with making a major effort in administrative and fiscal reform to drastically pare expenditures and review policy institutions and measures to rationalize administration and finances, the administration has broken up and privatized the Japanese National Railways, has privatized the Nippon Telegraph and Telephone Public Corporation and the Japan Tobacco and Salt Public Corporation, and has implemented other reforms in line with the recommendations of the Provisional Council for the Promotion of Administrative Reform and other reports. The success of this policy has been steadily turned to the people's benefit, as in the better service in railway, telecommunication, and tobacco enterprises and the use of proceeds from the sale of NTT stock.

I am determined to proceed tenaciously with administrative and fiscal reform. As was clearly stated in the recent opinion submitted by the Provisional Council for the Promotion of Administrative Reform, there must be no letting up in our efforts for reform.

Spending request standards for the fiscal 1989 budget have ben set consistent with this basic approach, and we will strive in drawing up the budget to further economize and rationalize on expenditures.


Other Important Issues

Next, I would like to say a few words about some of the other important policy issues that we face.

The Japanese economy is in an expansionary phase, domestic demand advancing steadfastly, corporate earnings continuing to increase, and further improvements being made in the employment picture. While promoting economic policy coordination with the other leading countries and working to stabilize exchanges rates, the administration intends to continue to work for flexible and appropriate economic management so as to achieve non-inflationary and sustained growth centering on domestic demand and to further rectify our external imbalances.

Looking ahead to the 21st century, the administration has drawn up a new economic plan from the perspective of Japan growing with and for the world to lay the development foundations for establishing a new economy and society and to promote policy coordination in harmony with the international economy. The administration will promote further economic restructuring while consolidating domestic-demand-led growth in line with this policy.

Land issues must be addressed if we want to move forward in creating comfortable living standards and sustaining economic and social vigor. Having recently received the Provisional Council for the Promotion of Administrative Reform's recommendations on land prices and other land policy issues, we are determined to draw up a Comprehensive Outline of Land Policy from the medium- and long-term perspective.

While land prices are stabilizing in Tokyo and other areas as a result of the measures that have been implemented, there is still a need to watch trends carefully. The administration intends to band together in promoting comprehensive policies on both the supply and demand sides for the creation of appropriate land prices under the Outline just mentioned.

In implementing these land policies, I hope the people at large will recognize that land is for the good of the community and the good of society and will extend these policies their every understanding and cooperation.

The concentration of population and functions in Tokyo is one cause for the rise in land prices. Seeking to escape the over-concentration and over-reliance on Tokyo and to work for the creation of the kind of multipolar and decentralized state envisioned in the Fourth Comprehensive National Development Plan, we will, in keeping with the spirit of the Law to Promote Multipolarization and Decentralization, make an effort to promote the dispersion of urban and industrial functions to outlying areas and to advance local development as well as greater contacts among regions and the orderly development of major metropolitan regions.

The administration has recently formulated its basic policy regarding the relocation of national government and other offices and has also decided which actual offices and the like are to be moved in accordance with this policy. Intending to set an example and to pioneer the move by private business consistent with the decentralization of urban and industrial functions, the administration is determined to make every effort to implement these policies.

The beef and citrus issues that had been outstanding between Japan and the United States were conclusively settled recently. Solution was also found for the beef issue that had been pending with Australia. Recognizing that beef and citrus production are crucial to Japanese agriculture, the administration intends to ensure their survival and will study what domestic measures are needed to strengthen these industries and will put these measures in place as soon as possible.

We are also studying what measures are needed domestically for the 12 agricultural products that recently saw agreement with the United States.

I believe it is important that, as well as establishing a strong agricultural sector able to hold its own in the very harsh climate in Japan and internationally, we work to promote the maximum improvement in productivity and to ensure stable supplies of foodstuffs at popularly acceptable price levels given the topographical and other constraints in operation. Prices for this year's rice, wheat, and other crops have been determined in light of this in the hope that they will stimulate farmers to achieve improved productivity and that they will win the understanding and support of the population at large.

At the same time, it is also important to reassess agriculture's role and characteristics in creating vigorous rural communities, in buttressing conservation and environmental protection, and in enhancing the individual's sense of worth.

In keeping with the report of the Agricultural Policy Council, the administration thus intends to strengthen and enhance a variety of policies to ensure that Japan has outstanding farmers, to improve the production infrastructure, and to upgrade agricultural technologies, as well as to make further efforts to ensure the vitality of agriculture and rural communities alike.

In the educational field, I intend to continue to promote educational reform, obviously to foster individualistic young people rich at heart who are able to play a vigorous role in the international community and also to encourage lifelong education and other innovations.


Foreign Policy

Next, I would like to say a few words about foreign policy.

There is a new impetus in East-West relations centering upon the United States and the Soviet Union and serious efforts are being made toward the resolution of regional conflicts. The fact that Iran has formally announced its willingness to accede to the terms of the United Nations Security Council Resolution calling for an immediate cease-fire in the Iran-Iraq conflict is a major step forward in the implementation of this Resolution.

I welcome these international developments and efforts. However, I also recognize that large numbers of political, economic, and other problems remain in a wide range of areas.

Given these international conditions, I intend, while consolidating the shift to a domestic-demand-led economy and further promoting economic structural adjustment, to work for policy coordination among the leading countries. At the same time, I am also working to preserve Japan's peace and security both by firmly maintaining the security arrangements with the United States and by ensuring that Japan has the moderate minimum self-defense capability it needs. In addition to these efforts, I have announced the International Cooperation Initiative for further contributing to the world, as mentioned earlier, and won the agreement of the other countries concerned.

Based upon Japan's position as a peace-loving nation, I took the opportunity provided by the Third Special Session of the United Nations General Assembly Devoted to Disarmament to enunciate specific policies that Japan is prepared to pursue to prevent conflicts and to resolve them peacefully, including providing personnel for appropriate positions. We are also working in international cultural exchanges to contribute as a nation of culture. In addition, we are seeking to enhance Official Development Assistance to the developing countries quantitatively and qualitatively in line with the new Fourth Medium-Term Target.

Close and cooperative relations with the United States and Europe are indispensable if Japan is to play a significant role for world peace and prosperity. The relationship with the United States especially is the cornerstone of Japanese foreign policy, and, as you already know, Japan and the United States have worked through joint efforts on both sides as confirmed with President Reagan to gradually resolve the various issues outstanding between us, including the Public Construction Project Accord, the Beef and Citrus Agreement, and the Science and Technology Agreement.

In Europe, the EC countries are moving steadily ahead toward a single market by 1992, and my two visits to Europe have made me even more aware of the need to give greater breadth and depth to Japan-Europe relations, both for the relationship's own sake and to create a better balance in the trilateral relations among Japan, the United States, and Europe.

At the Toronto Summit, I reaffirmed with the other leaders the need for all of our countries to cooperate in working to solve the various international political and economic issues we face. I especially emphasized the importance of dialogue with the newly developing economies, the so-called NIEs, and expressed my views on the situation in the Philippines and the problem of Cambodia, as well as calling for cooperation in ensuring that the Seoul Olympics - so important to stabilizing the situation on the Korean Peninsula - are a success.

I also place great emphasis on the establishment of relations of trust with the leaders of the other Asia-Pacific countries and have visited a number of countries in this region: the Philippines, the Republic of Korea, and Australia. In addition, I hope, with the Diet's permission since this would be during the current Session, to visit China late this August to mark the tenth anniversary of the signing of the Treaty of Peace and Friendship between Japan and the People's Republic of China and to work for the further maintenance and development of our bilateral relations.

On relations with the Soviet Union, the Japanese position remains unwaveringly one of wanting to establish stable relations based upon true mutual understanding through resolving the Northern Territories problem and concluding a peace treaty. Hoping that the new political developments in the Soviet Union will be reflected in Japanese-Soviet relations, I intend to continue our patiently persistent foreign policy efforts.



These, then, have been my thoughts on the important issues facing us.

Looking back on the progress that Japan has made in the 43 years since the war's end, I am struck anew with a sense of profound wonder.

The wonderfully affluent Japan that we enjoy today has been built on the sweat of our ancestors. The Japanese people have made judicious choices and worked hard, and we have been blessed by a number of fortuitous circumstances, including friendly and cooperative relations with the United States and other countries. Yet it must be admitted that this astonishing economic development has been accompanied by a tendency to perhaps overlook spiritual fulfillment. Seeking to rectify this imbalance, we must live our lives in quest not only of material satisfaction but also spiritual well-being.

Japan is today at a major turning point. Yet I believe that, while seeking to create a nation of true affluence with balance between the physical and the spiritual and moving boldly to rectify the distortions caused by outdated systems, institutions, and other shortcomings, the right road for Japan is that of putting our vigor and wealth to use in the cause of world peace and prosperity.

Is it not only right that we should move ahead unflinchingly, helping each other and sharing each other's sorrows, so that each of us feels that life is good and getting better - today better than yesterday, tomorrow better than today?

This need to stabilize and enrich Japanese life for the future makes it especially important that tax reform be effected.

While each of us has to answer the question of how to spend his or her life in the most individually rewarding and worthwhile way, it is imperative for society as a whole that the broad range of choices be available and that the climate be conducive fulfillment, and I am convinced that this is a very important political question.

No matter what difficulties I have encountered, I have reminded myself of the ancient wisdom embodied in the saying "Though listeners I have none, still will I expound my beliefs, if only on the street corners," have taken the people's concerns to heart, and have devoted my life to resolving the important issues before us. I am determined to do everything that I possibly can to ensure that Japanese society is one of fair play and vigorous creativity.

In this, I ask for the continued understanding and cooperation of all the people.



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