[Title] Remarks Following Discussions With Prime Minister Noboru Takeshita of Japan

The President.

It has been a great pleasure to welcome Prime Minister Takeshita on his first visit to Washington since taking office in November. He is the leader of one of the

world's great nations and one of America's most valued friends.

Our meetings were constructive and amiable. We discussed the vital issues of the day and established an excellent personal rapport. Good personal relationships between the leaders of Japan and the United States are essential as our two nations strive to confront the chal-

lenges of this century and the next.

During our discussions today, Prime Minister Takeshita and I found that our views on international questions coincide to a remarkable degree. We share an abiding commitment to democratic institutions and to free markets to protect freedom and human rights. We are dedicated to improving the economic well-being not just of our own people but of all mankind.

In this regard, I was especially pleased with the Prime Minister's global economic perspective. He outlined significant plans for expanding Japanese domestic demand and stimulating growth. He reviewed Japan's plans to increase its foreign assistance budget next year to an amount second only to that of the United States. And he expressed Japan's determination to continue the process of economic adjustment. The Prime Minister and I discussed and affirmed our support for the economic policy coordination process adopted at the Tokyo and Venice economic summits. A joint statement concerning our bilateral undertakings in that regard will be released shortly.

The U.S.-Japan treaty of mutual cooperation and security is the foundation upon which our relationship is built. I was satisfied to note that U.S.-Japan cooperation in the national security area is strong and growing and that Japan's recently announced budget provides for continued significant increases in the area of national defense. Japan's growing contribution to the maintenance of U.S. forces in Japan is of immense value to the United States. I might add that Japan's national defense program is entirely consistent with the concept of self-defense and in no way poses any threat to others.

During our meetings, I briefed the Prime Minister on the details of last month's summit. We agreed on the benefits of the INF treaty, and he was encouraged by the possibility of even further arms cuts with the Soviet Union. I was gratified that the Prime Minister expressed Japan's fullest support of our actions, and I assured him that we would consult fully with all of our allies as we continue our discussions with the Soviet Union.

The Prime Minister and I recognized the danger posed to our mutual security in the export of certain kinds of high technology. The Prime Minister assured me that Japan has taken the necessary legislative and administrative measures to prevent technology leakage. I told the Prime Minister that I appreciated his actions and his commitment to the vigorous implementation of controls over exports of sensitive technology. The Prime Minister and I concur on the importance of the new nuclear cooperation agreement. We believe it to be a good agreement, and we will exert our best efforts to have it come into force expeditiously.

The Prime Minister noted that Japan's global trade surplus is declining and underlined his determination to address bilateral issues. I was pleased with his assurance that he intends to resolve a particularly difficult trade issue - the problem of access for the U.S. construction industry - in a satisfactory manner. We agree the Uruguay round [of the General Agreement on Tariffs and Trade] must succeed and that revision of the world trading system should include a comprehensive reform of trade in agriculture and services. I expressed appreciation for the Prime Minister's efforts on trade, stressing the urgency of expanding opportunities for U.S. farmers and other exporters at a time of increasing pressure for protectionism here in the United States. We concurred on the importance of keeping trade flowing and barriers down. For our part, I intend to continue my efforts to reduce our budget deficit, improve American competitiveness, and combat protectionism.

We reaffirmed our determination to conclude a new science and technology agreement with equitable and expanding research benefits for scientists of both countries. I expressed appreciation for Japan's initiatives to provide more than $4 million in science fellowships to American researchers. We also reaffirmed the spirit of the 1983 U.S.-Japan joint policy statement on energy cooperation.

The Prime Minister and I noted with satisfaction political developments in the Republic of Korea and our intention to help make the 1988 Olympic games a success. We also pledged to do our utmost to help the Philippine Government and its people in this period of economic adjustment.

In sum, our talks were positive and forthright, and it's been a great pleasure to have the Prime Minister here with us in Washington. I Iook forward to being with him again in Toronto this spring.

The Prime Minister.

Thank you, Mr. President. I'm extremely pleased with the results of the cordial and candid exchange of views I had with you today. Thanks to your efforts over the past years, Mr. President, the historic INF treaty was signed last month. I look forward to its expeditious entry into force. And as one representing a member of the West I am determined to firmly support the President in his pursuit of substantive progress in East-West relations, where much remains to be done across a broad spectrum of areas.

The President and I confirm that the cooperative relationship between Japan and the United States, with the unshakable security arrangements as its cornerstone, is essential for the peace and stability of the Asia-Pacific region. I will continue my efforts, with the cooperation of the President, for further strengthening the credibility of the Japan-U.S. security arrangements.

I explained to the President that the Government of Japan has continued to provide the funds necessary for achieving its current defense program. Japan has also continued to increase its host nation support for U.S. forces in Japan, whose stationing is an indispensable part of the Japan-U.S. security system. Moreover, in view of the recent economic conditions adversely affecting the financial situation of U.S. forces, I noted to the President that the Government of Japan has decided on its own initiative to increase further Japan's share of such expenditures.

The President and I agreed that today, more than any other time in history, policy coordination among major countries is required to ensure sustained growth of the world economy and to correct external imbalances. In this respect, we agreed that the roles to be fulfilled by Japan and the United States are of vital importance. We shared the recognition that together with the measures taken by individual countries, stability of exchange rates is indispensable to the achievement of these goals as described in our joint statement.

Fully aware of the heavy responsibility commensurate with Japan's status in the international economy, I am determined to carry out a vigorous economic management policy with emphasis on domestic demand expansion to promote structural adjustment to the improved market access and to strive for a further steady reduction of the current account surplus.

In this connection I explained to the President that despite an expected drop in net exports, Japan's growth for fiscal year 1988 is now projected at 3.8 percent, a rate higher than the previous fiscal year, through the formation of the fiscal '88 budget geared toward domestic demand expansion with a substantial increase in public works spending. I also explained the prospect for a $10 billion reduction in Japan's current account surplus for fiscal '88 through these measures. The President highly appreciated my explanation. The President on the other hand, explained that the measures for budget deficit reduction have been enacted based upon the recognition that deficit reduction is essential to the stability of today's world economy. I paid tribute to the President for his endeavors.

With regard to various economic and trade issues which arise as a matter of course between two increasingly interdependent economies of Japan and the United States, the President and I confirmed the basic posture that their solutions should be sought in the spirit of cooperation and joint endeavors and with the aim of expanding, and not contracting, economic exchanges. I expressed my hope that a mutually satisfactory solution will be reached on the pending issue of access to major Japanese public works on the basis of the proposal that Japan has recently made. I also stated to the President the need for early resolutions of the pending issue of Japan-U.S. semiconductor trade.

The President and I exchanged views on the trade bill currently under deliberation in the U.S. Congress, and I expressed my firm support to the President's determination to contain protectionism. The President and I shared the recognition that this year is especially important for the success of the Uruguay round and agreed that our two countries should take the lead in its promotion.

I explained Japan's intensive efforts to prevent the recurrence of illegal diversion of high technologies. The President highly appreciated the measures which Japan has taken for this purpose. In this connection, I expressed Japan's deep concern about moves in the U.S. Congress toward sanctions against foreign companies, including Toshiba Corporation. The President and I agreed on the importance of enhancing the cooperation in the field of science and technology. I explained about my government's initiatives to increase the number of American scientists who will be invited to Japan for research. The President welcomed these initiatives.

I expressed my views concerning the recycling of funds to the developing countries, including the quantitative and qualitative improvement of our official development assistance, in particular, and stated that in the draft budget for fiscal '88, an increase of 6.5 percent over the previous year was secured for ODA [official development assistance]. In this connection, I was encouraged that the President appreciated highly my recent participation in the ASEAN [Association of South East-Asian Nations] summit and my subsequent visit to the Philippines. The President and I affirmed, in particular, to continue our support to the Aquino government and to welcome the Republic of Korea's firm stride along the road of democracy, as evident in the recent Presidential election, as well as to cooperate closely towards the success of the Seoul Olympics this fall.

The President and I agreed on the importance of the new Japan-U.S. nuclear cooperation agreement and its prompt entry into force. The President and I, looking forward to a successful Toronto summit, agreed to meet again in Toronto.

In completing my meeting with you Mr. President, I feel confident that we have strengthened further the foundation of the relations between our two countries. It is my determination to build upon this basis to make Japan a nation that contributes to the world.

I wish to express my heartfelt appreciation to President and Mrs. Reagan for the warm welcome extended to me and my wife as well as our gratitude to the American people for their kindness and consideration during our stay.

Thank you very much.