[Title] Common Opportunities: Japan and Canada in the 21st Century

Ladies and gentlemen, thank you and good morning. And, Mr. John Powles, thank you for your kind introduction. A note for the soccer fans here: several hours ago, Japan won against Tunisia, and now, Team Japan will be proceeding to the next round as one of the best 16 teams.

I've always liked what the late Prime Minister Trudeau said. He said, "Canada is not a country for the cold of heart or the cold of feet."

I have found that observation to be quite true. My family and I enjoyed skiing at Whistler twice. Once 10 years ago and once 5 years ago. We returned not only because of the grand scale of the ski-slopes and the beautiful scenery. We returned because of the warmth of the Canadian people. Both times we passed by the elegant Chateau Whistler Hotel but ended up in a less expensive condominium. I said to myself, "Some day I am going to stay at that Chateau."

How happy I was when I found out that the G8 meeting would be held at Chateau Whistler Hotel!

And let me say right at the beginning that the G8 Foreign Ministers' meeting at Whistler was very successful thanks to the wise and creative chairmanship of Foreign Minister Graham.

Today, I want to talk to you about our common opportunities in relation to economics, to foreign affairs and to cooperation between our two nations.

Let me start with the economic agenda in Japan. First of all, even with all its current difficulties, the Japanese economy is still the second biggest in the world after the US, occupying some 14% of the world GDP. Japan's per capita GDP is among the highest in the world and comparable to that of the US. Both its Net External Assets and Foreign Currency Reserves are absolutely the largest in the world.

We realize our responsibility is tremendous for sustained world growth. This is why Prime Minister Koizumi has vigorously pursued structural reforms under the slogan of "No growth without reform." We are determined to revitalize our economy. Japan seeks an economy that is dynamic and adaptable to the rapidly changing socio-economic environment, not because we are told to do so, but because we need to do it.

For example, out of the 118 special public corporations, 45 will be privatized, 17 will be abolished and 38 will become independent entities. We have addressed the problem of the increasing burden of government bonds, and funds are being redirected from unessential public works to such priorities as environment, science and technology. We are working on expediting disposal of non-performing loans. Our efforts are producing results, and signs of recovery are appearing. Japan's economy grew at 1.4 % in the first quarter of this year over the previous quarter, which translates into a 5.7 % annual growth. Consumer confidence is recovering. The recovery will be centered on private demand in the second half of this year, and we will see more positive growth in 2003.

We know that "we have no choice but to transform ourselves from a government-led society to a private-sector-led society with more decentralization of power from central government to local governments." We know that this transformation is accompanied by a great deal of pain. Doesn't this sound familiar to you?

Prime Minister Koizumi is now working on a new package of economic revitalization including tax reform, which will be announced shortly.

With further progress in our structural reform, the growth is expected to be at a steady pace of at least 1.5% in real terms after 2004. The budget deficit of central and local governments will shrink. Eventually, a budget surplus is expected in the early 2010s.

We are undergoing a process of painful adjustment.

Ladies and gentlemen, I am convinced that we will overcome this challenge.

Let me talk a little about Japan's neighbor, China. Some see the economic development of China as a threat to Japan's future. Developing economic relations with China should not be seen as a hollowing-out of Japanese industry. Instead, it can provide an opportunity to nurture new industries in Japan to develop their activities in the Chinese market. It can provide an opportunity for Canadian industry as well.

There are also challenges for China. For example, the income gap between coastal and inland regions and environmental problems such as yellow sand and acid rain are becoming more and more serious. Some regions and industries in China are expected to face challenges as a result of China's accession to the WTO. It will be beneficial to all if China manages to overcome these challenges and become a rule-based, open market economy. I hope that Canada and other nations in the region will join Japan in helping China overcome these challenges.

Let me now turn to another opportunity: Japan's foreign policy.

In February, Prime Minister Koizumi asked me to change my portfolio from Environment Minister to Foreign Minister. On assuming this job, I stressed that Japan's foreign policy should be "strong," "caring" and "straightforward." We need to be "strong" in standing against lawlessness and chaos. We must look with "caring" eyes at every human being. And we must be "straightforward" so that we can be understood.

As we look out across the world, we face the challenge of instability caused by terrorism, regional conflicts and weapons of mass destruction. The incidents of September 11th have made us aware that terrorists are no longer far away. They are here. Japan is fighting terrorism on a variety of fronts together with the international community. Japan has shown solidarity by dispatching Self Defense Force escort ships to the Indian Ocean and cargo planes to Pakistan.

Japan is playing a leading role in the reconstruction of Afghanistan. I visited Kabul in May and saw the situation with my own eyes. It is clear that Afghanistan has three pressing needs. It requires domestic security. It requires a peace process. And it requires reconstruction and humanitarian assistance. Japan will continue to do its utmost to address these needs.

On India and Pakistan, Japan is joining the international efforts to urge the two countries to de-escalate the tension and resume dialogue. I have personally talked to the Indian and Pakistan foreign ministers and dispatched my Senior Vice-Minister to both countries. Japan is the sole country in the world that has suffered from the devastation of atomic bombs, and this is why we have been deeply concerned with the situation in this region. I am encouraged by constructive signals emanating from the region with the visits by US Deputy Secretary of State Armitage and Secretary of Defense Rumsfeld. Japan will redouble its efforts, along with those of other G8 partners, for de-escalation and for a more stable future of the region.

On the Middle-East, processes of restoring security, providing humanitarian and reconstruction assistance and accelerating peace negotiation must go hand in hand. I told Prime Minister Sharon and Chairman Arafat that Japan is ready to play an active role in promoting these steps. Also, I presented to them Japan's roadmap for peace, which combines progress in the peace process with Japan's assistance to the Palestinians, and also our plan to assist rebuilding and reforming the Palestinian Authority.

We also face the more indirect threats to humanity such as poverty, refugees, environmental destruction and infectious diseases. In recent years, Japan has stressed the need for the international community to tackle the threats to the survival, dignity and livelihood of individual human beings. Issues like anti-personnel land mines, African development or prevention of global warming are very important. Japan ratified the Kyoto Protocol last week. Japan, together with Canada and other nations, must continue our efforts to establish a common rule for this area.

Finally, let me talk about the last but not the least opportunity: revitalizing our bilateral relationship.

Japan and Canada share a similar international outlook. We are both active in promoting peace, and we both believe in what might be called "soft power." Canada has a long history of participating in UN peacekeeping operations, and Japan is now becoming more and more involved in such operations. Japan and Canada have worked together on the Golan Heights as part of United Nations Disengagement Observation Forces. Recently, Japan has dispatched 690 Self Defense Force personnel to PKO missions in East Timor. Japan and Canada together strongly advocate arms control, disarmament and non-proliferation. Both countries support the Comprehensive Test Ban Treaty. The anti-personnel land mine ban convention was a home run for bilateral cooperation. On countering infectious diseases, Japan and Canada sent a joint research mission to Malawi in Africa to counter HIV/AIDS and other infectious diseases and to promote hygiene education. From all of this, you can see how closely we cooperate on international political and global issues.

On international economic issues, Japan and Canada have deepened our cooperation in WTO, OECD, APEC and other multinational fora.

Our bilateral relations are excellent, especially if we look at the strong grassroots ties, exchanges of youth and cultural ties. There are 70 sister city relations between Japan and Canada, including the one between Yokohama and Vancouver. These sister-city relations are supported by links between colleges and high schools, home stay arrangements and ties between Rotary Clubs and Lions Clubs. The Japanese Government implements the JET program, The Japan Exchange and Teaching Program, which invites Canadian youth to teach English in Japanese schools and municipalities. Since 1988, about 4,800 Canadian youth have spent over a year, usually 2-3 years, in Japan. The working-holiday visa program is extremely successful for attracting youth in both countries to visit each other. About 5,000 Japanese youth come to Canada annually and about 1,000 Canadian youth come to Japan.

We need to revitalize our economic relations. As a follow-up to Prime Minister Chretien's Team Canada's visit to Japan in 1999, Japan has sent 2 IT missions to Canada. Today, a 25-member Bio-tech mission from Japan is networking with Bio-tech start-up companies in BC at UBC. Our governments are working together to promote more recognition in Japan of new Canadian high-tech industries. I certainly hope that businessmen in the private sector heed this message and look into the new opportunities in each other's markets.

Ladies and gentlemen, I would like to conclude my remarks by recalling one of the most respected internationalists in the history of Japan: Dr. Inazo Nitobe. He served as Deputy Secretary General of the League of Nations soon after its inception during the 1920s. His portrait is printed on the 5,000 yen bill. He once stated, "I wish to be the bridge across the Pacific." He then literally devoted himself to this cause for the rest of his life. In fact, after exhausting himself participating in an international conference held in Banff, he died here in Victoria, BC, in 1933.

Thanks to the efforts made by Dr. Nitobe and those who followed him, we are now enjoying a sea of people-to-people exchanges across the Pacific. We understand each other better than ever in our history. Our economic and political links are stronger than ever in our history. Our common opportunities are more real than ever in our history.

Ladies and gentlemen, let us continue to build Dr. Nitobe's bridge over the Pacific.

Thank you for inviting me, and thank you for your attention