[Title] Press Conference by Prime Minister Naoto Kan Following the APEC Economic Leaders' Meeting in Yokohama

MODERATOR: We shall now begin the press conference given by Prime Minister Naoto Kan of Japan. Initial remarks by the Prime Minister followed by questions and answers. Mr. Prime Minister, please.

PRIME MINISTER NAOTO KAN: First of all I would like to tell the Japanese people that the APEC Economic Leaders' Meeting which I chaired here in Yokohama has been successfully concluded with important results. APEC includes the United States and Canada as well as Chile and Peru and others on the eastern side of the Pacific, as well as ASEAN, China, Korea and Japan, countries on the western side of the Pacific. In other words, 21 economies of the Asia Pacific comprise this APEC gathering with emphasis on the economy. With overall about 50% of global GDP and about 40% of population, today this region of APEC is the growth center of the world pulling ahead the world economy.

At the meetings this time we adopted the Yokohama Vision, the Bogor Goals and beyond, which are aimed at making the region's economic growth even more sustainable, so that it will provide greater traction to the world economy. To that end we agreed on several points. One major item amongst them is to organize a Free Trade Area of the Asia-Pacific (FTAAP) toward the year 2020. Numerous acronyms abound, but economies that participate in APEC will be seeking this direction of ultimately achieving what we call the FTAAP, encompassing the entire region of APEC. There are numerous pathways towards the FTAAP; there could be bilateral FTAs and EPAs and building up on these also are multilateral undertakings like ASEAN+3 or ASEAN+6. There is also the Trans-Pacific Partnership (TPP) Agreement involving multilateral countries so there are numerous undertakings. In any case, the ultimate objective is to organize a free trade area that encompasses the entire Asia-Pacific region and each economy shall participate actively in the endeavors to move along these pathways towards the FTAAP. This is the major direction that has been set by the Yokohama Vision.

In Japan, ahead of the APEC Meeting, we adopted the Basic Policy on Comprehensive Economic Partnerships as a Cabinet decision. Japan's agriculture is weakening today and we shall revive this agriculture, but at the same time we shall work on economic partnerships and liberalization endeavors, an area in which Japan has fallen behind other countries. We shall engage in this area in terms of a new round of the opening up of Japan in the 21st century. We shall work on both agricultural revival as well as the opening up of Japan at one and the same time as we made clear under this Basic Policy. We have included lots of achievements in the Yokohama Vision and we look forward to attending the next APEC Economic Leaders' Meeting under the chairmanship of the United States in Honolulu Hawaii and we shall work towards producing substantive results steadily.

Also, during the period of the APEC meetings, I had bilateral summits with several countries, the United States, China, Russia, as well as Korea and Canada, and after this press conference I still will have bilateral summits with a few other leaders. All of these meetings have been very significant and useful. With the United States we agreed to further deepen and advance Japan-US relations and the alliance, and with China we agreed on furthering mutually beneficial relations based on strategic interests. Also, with Russia we agreed to discuss two fields, the issues of territory and economy in cooperation. I believe all of these meetings and discussions have produced steps forward.

With Japan having been the sole country with overwhelming economic power in Asia, we now have other countries that are growing even more significantly and at a faster pace, than that of Japan's high economic growth era. In the days ahead in this region, if we are to continue to survive as countries with vitality, we have to go together economically with the entire Asia-Pacific countries. We have to be tied closely to these countries and we need to create an environment in which together we will grow and prosper or develop. Many countries have a younger population, but at the same time suffer from lack of financing and infrastructure. They are having difficulties in economic development, whereas in Japan the aging of society is advancing, but at the same time we have high levels of technology as well as a built up financial capital base. Therefore, partnerships between Japan and other Asian countries and also Latin America and Canada, whereby we can grow with all these countries across the Pacific as well, are something that we should aim for and therefore we shall once again open up Japan in this era of Heisei [in the 21st Century]. 150 years ago at the beginning of Meiji, Japan decided to open up its doors to the outside world and Yokohama was the port that provided the gateway to the outside world. So considering the fact that we are meeting here in Yokohama, I think this APEC meeting will be a new page of history in APEC and also a new page for Japan as well. Of course there are numerous problems ahead of us but we need the courage and strength to overcome such difficulties, and by exerting such courage and strength, we shall try and create new Japan. So to that end I would like to ask for your understanding and support and with that I would like to conclude my opening remarks. Thank you very much.

MODERATOR:Now the floor is open for your questions. Those of you who are designated, please move to the standing microphone and please identify yourself by stating your name and affiliation first. Maybe a member of the Japanese press first. Mr. Nishioka?

QUESTION (Nishioka, Mainichi Newspapers):As the results of the APEC summit, my question is that, as you mentioned, towards the realization of FTAAP, the TPP, ASEAN+3, ASEAN+6, all these three frameworks have been referred to and been further developed in the statement. What sort of achievement do you think APEC has made towards the realization of regional economic integration? Also there has been the summit meeting of the TPP, and you attended as an observer. What sort of views have you expressed and what sort of requests were expressed by the TPP members?

PRIME MINISTER NAOTO KAN:First of all, with regard to discussions on regional economic integration and others, overall I think that the majority of the voices were very positive ones. APEC has this target for developed economies of achieving thorough trade liberalization by 2010 under the Bogor Goals and that other economies should also achieve such liberalization by the target year of 2020. APEC has advanced towards these goals. As for those goals for 2010, we agreed on the assessment that we have made sufficient progress. On top of that, the question is how to advance further regional economic integration. That is the discussions we had. On individual issues of course, different countries have different positions, but all economies are positive about such regional economic integration. We also need to push for global economic partnership such as WTO Doha Round negotiations and I think in terms of this recognition, all economies saw eye to eye. That itself I believe marks a major progress.

Now Japan needs to work on reviving agriculture and also to further open up Japan to the outside world. So we had adopted this basic policy ahead of these APEC meetings and I was told that the fact that we had announced this policy provided a positive stimulus to other economies as well. That was the voice I heard from many economies.

There was a meeting of the leaders of the nine TPP member countries held here during APEC. Japan has not decided to participate in TPP but as chair of APEC, we were requested to participate as an observer. In doing that I explained that the efforts that Japan is making today are very much in line with APEC efforts, that is, we shall further advance bilateral consultations towards economic partnership or free trade arrangements. There are also consultations where we have not yet been able to engage ourselves in negotiations, and we shall also be active in realizing such consultations. As for TPP, I stated that it is necessary for us to glean various information and therefore we shall launch consultations for that purpose. From many TPP member countries, what I heard was that they would like Japan to announce as early as possible its decision to participate in TPP negotiations. In other words, with the nine TPP member countries, this TPP is a major banner for them to advance further economic liberalization. That is my sense. Now Japan's position today is that we have not yet reached the point of making the decision whether to participate or not to participate in TPP, but we shall engage actively in consultations with the nine TPP members and in that process we may also pursue the possibility of bilateral or multilateral trade liberalization talks with other countries than the TPP member countries.

MODERATOR: The inducted members of the foreign press? If necessary please listen to the Japanese interpretation. Yes please.

QUESTION (Nicolaysen, DPA, GERMAN PRESS AGENCY):It's a kind of follow-up to the question my colleague from the Japanese side just asked. Considering that China prefers the ASEAN+3 framework as a core for the envisioned FTAAP, how do you personally see the chances that Japan will eventually join the US-backed TPP framework and that the TPP would be eventually the stepping stone for the free trade zone, FTAAP? Thank you very much.

PRIME MINISTER NAOTO KAN: As I already stated, Japan's position today is that of course we have various EPAs already established with various countries, and there are also talks for EPAs underway as well, and that our basic position is to actively pursue such talks. As for TPP, as I mentioned earlier, we shall engage in consultations with countries concerned, including for the purpose of gleaning information. Now, it is not necessarily the case that China is the center of the ASEAN+3 and that the Untied States is the core country of the TPP. We do not attach any superior colors to these undertakings. Of course Japan is part of ASEAN+3. Japan would also be part of ASEAN+6 and so we shall in parallel pursue such multilateral undertakings as well. And in doing so, I believe we can move closer towards the FTAAP, which encompasses the entire Asia-Pacific region, and that such region-wide partnership can be created.

MODERATOR: Again, a question from the Japanese press. Mr. Noguchi?

QUESTION (Noguchi, Nippon Television): My question concerns the Japan-China and Japan-Russia relationships. During the Japan-China summit, it was reported that you conveyed Japan's firm position concerning the fishing boat collision incidents of Senkaku. What does firm position' mean? Did you mean that Senkaku is the inherent, indigenous territory of Japan? Do you think by conveying that firm position, China will make efforts to prevent a recurrence of a similar incident? And concerning the Japan-Russia summit talks, as a result of such talks, do you think that positive outcomes have been generated for the resolution of territorial issues between Japan and Russia? Isn't there a concern that only economic cooperation will go forward and territorial issues remain a stalemate?

PRIME MINISTER NAOTO KAN: Japan-China summit meeting; in that meeting I clearly conveyed the view that the Senkaku Islands are Japan's inherent territory, and that Japan's basic position is that there is no territorial issue in this region. You also asked a question about preventing the recurrence of the collision incident. This time, because it is a summit meeting between the leaders, we stated our basic viewpoint mutually, and also we confirmed anew that we shall further promote the mutually-beneficial relationship based on strategic interests. So we confirmed anew this basic direction and could realize turning our relationship back to the basic position at the time I took office in June. In the Japan-Russia summit meeting, I clearly stated my sense of protest to President Medvedev for making a visit to the Kunashiri Islands. Also because the territorial issue has remained unresolved, we have not signed a peace treaty with Russia. In light of this, we agreed to continue to discuss the territorial issue. At the same time, Russia, if anything, is now shifting its search for various possibilities in the eastern side of the country and in the Pacific, and Japan can cooperate, discuss the resources issues such as natural gas, and could also engage in economic discussions as well. Of course, these issues are of a different nature, but as we deepen our cooperative economic relations between our two countries, I am sure that it will have a beneficial effect on the territorial side of the questions as well. That is a real possibility. So we shall actively pursue creating two occasions to discuss these issues, and engage actively in bilateral consultations.

MODERATOR: Again, a question from a member of the foreign press. Yes please.

QUESTION (Linda Sieg, Reuters):I'd like to follow up on relations with China but broaden the question a bit. Obviously relations with China have been seriously strained due to the recent incident in the East China Sea. You met with Chinese President Hu Jintao, but I don't think anybody thinks that 22 minutes can overcome all the problems. So how do you really think that Japan and China can overcome these deep-seated problems? And what is the risk for the Asia-Pacific region, both economically and in security terms, if you can't overcome the problems, particularly the risk? And in relation to that, I'd just like to ask, China has said it would address the matter of export restrictions on rare earth minerals, but would Japan consider bringing a complaint to the WTO if the problem is not resolved? Thank you.

PRIME MINISTER NAOTO KAN: First, in the areas around the Senkaku Islands, Japan's position is that no territorial issue exists, as I have repeatedly stressed. Now, if you look at examples of various other countries having territorial issues when they neighbor on each other, there still remain numerous problems today. But that doesn't mean that the two countries concerned will not be able to engage in economic, cultural or people-to-people contacts because of these instances of such territorial issues. In fact, recently I had a conversation with Prime Minister Singh of India, and India and China in fact are deepening their economic ties. They still have various problems, but at the same time they are advancing relations where possible and necessary. So there exist this kind of bilateral relations in many cases. Over the years, since the end of World War II, Japan has provided ODA (Official Developmental Assistance), and provided cooperation to China in numerous other forms as well. That provided a major driving force for China's economic growth. When you engage in discussions calmly with the Chinese people, they recognize that and express their gratitude. So we do have numerous problems in our bilateral relations, but we need to overcome those and establish firm relations between our countries. That is the major significance of the mutually-beneficial relationship based on strategic interests. And so we shall further work for closer Japan-China relations, bearing that in mind. With regard to rare earth minerals, the Ministers concerned are making efforts to address that issue. But the Chinese side has also stated to the effect that they do not have the intent of using the rare earth minerals as some sort of means or ploy. We shall continue to deal with this matter calmly as well, based on examining our future response.

MODERATOR: Now a question from a member of the Japanese press. Mr. Takeuchi?

QUESTION (Takeuchi, Tokyo Shimbun):My question has to do with the US-Japan relationship and the deepening of the alliance. During your meeting with President Obama yesterday, you received an invitation to visit the United States next spring, and you accepted that invitation. Now, during your visit in the United States next year, if you were to come up with a joint statement on deepening the US-Japan alliance, then you will be expected to demonstrate some progress on the pending issue of Futenma. And towards the formation of a joint statement, how would you be dealing with the US-Japan relationship including Futenma issues?

PRIME MINISTER NAOTO KAN: First of all, shortly before I assumed Prime Ministership, on May 28, under Prime Minister Hatoyama, a Japan-US agreement was reached. At that time, as Deputy Prime Minister, I certainly was in a position of sharing the responsibility, but once it was decided that I shall be responsible for the government, I have decided to move the Japan-US relations which seemed to be on somewhat awkward ground, to more firm ground. And to that end, I have made several efforts. The first that I did was to put the Japan-US alliance as a cornerstone of Japan's diplomacy. There remains no change to that. We shall also work on the Futenma issue, firmly on the basis of the Japan-US agreement of the May 28, but at the same time, we will strive to seek the understanding of the Okinawan people. As a result, gradually, Japan-US relations have returned to more stable ground, and that's where we are today. At the same time, on the Okinawa issue, I certainly wished to visit Okinawa more, but in the first place, within our party, because of the various problems in relations we have with Okinawa, the party sides told us that they will be dealing with the issue first, and therefore they wanted me to wait, to act as government, and wait for the efforts of the party for the time being. There will also be some elections, including the gubernatorial election in Okinawa, and therefore, with the exception of visiting on the day of war memorial immediately following taking office, I have refrained from visiting Okinawa, and have worked by engaging myself in various meetings in Tokyo. At the Japan-US summit meeting, yesterday, I did not really discuss all the details, but there will be the gubernatorial election in Okinawa later this month, and we will see the results of that election as well. After that, I shall try and clearly communicate my thoughts to the people of Okinawa by creating various opportunities. Also, I explained to President Obama that the views of the people of Okinawa with regard to the May 28 agreement is a very harsh one, but that I shall do my best in trying to tackle this problem. Fourteen years ago, for the purpose of removing the risks accompanying Futenma Air Station, I believe the agreement was reached between the Hashimoto Administration and Clinton Administration and I would like to tackle this problem with utmost effort.

MODERATOR: The scheduled time is drawing near, so this is going to be the last question. A member of the foreign press, please.

QUESTION (Anthony Rowley, Singapore Business Times, Singapore):Prime Minister, you have promised to open up Japan again, including its protected agricultural sector and to do this in a relatively short space of time. My question is, with respect, perhaps you are not raising realistic expectations among your trading partners, especially with regard to agriculture, given the very strong opposition among Japanese farmers to the TPP. And if you are able to liberalize the agricultural sector, can you be sure that Japan will get compensating benefits in its exports of manufacturers to other trading partners?

PRIME MINISTER NAOTO KAN: Japan's agriculture today, in some parts, is very strong. At APEC this time, Japanese cuisine was highly appreciated, and organically grown vegetables, splendid strawberries and other kinds of fruit, and flowers I think, these are indeed very vigorously growing sectors of agriculture. Having said that - and agriculture, by the way, is called a primary industry - but essentially what is created through agriculture should be processed in a secondary sector, then served to various consumers and enjoyed with pleasure at such places as restaurants in the tertiary sector. So the producers should be able to share in a legitimate manner the value added, and if, for example, farmers could also engage themselves in tertiary sectors, then I believe we can find a pathway towards the revival of agriculture as well. Now, if you look at the average age of the farming sector, it is 65.8 years, close to 66 years. Why is this the situation today? Young people dislike agriculture? I don't think that is the case. I'm sure there are young people who wish to try agriculture. They would like to engage in agriculture. But unfortunately, in Japan, you cannot buy farmland unless you are engaged in agriculture. The farmland law has been revised several times, but that restriction basically still remains. If you want to become a carpenter, or a barber, of course you need appropriate training, but you don't face this kind of restriction in agriculture. If you want to become a farmer, well, at the time of correcting the situation of peasant farmers after the war, the ownership system, for the purpose of protecting the small-scale farmers, this land ownership restriction was instituted. Today, that blocks the free entry of young people who are willing to engage in farming. Also the ordinary businessman cannot enter into farming or own farmland. Young people with entrepreneurship such as those of venture companies, if they could be encouraged to engage in farming, with the leading-edge agricultural technology of Japan, and also if we could have the perspectives and leadership of the secondary and tertiary industry as well, then I think the revival of Japanese agriculture will be possible. Of course, reforms will entail pains but we need to get down to concrete action in agricultural reform, and we have already decided to establish at an early time, an agricultural reform headquarters and I have instructed to that end, to Agricultural Minister Kano, and Minister of National Policy Gemba. So I hope that for the reform and revitalization of this agricultural sector, as well as to open up Japan much more freely in terms of trade and the flow of people, goods and finance. And so I would like to try and do my best with all the members of my Cabinet in that direction.

MODERATOR: This concludes the press conference given by Prime Minister Kan. Thank you very much for your attendance and cooperation.

PRIME MINISTER NAOTO KAN: Thank you very much.