[Title] Press Conference by the Prime Minister of Japan, Denver Summit

I. Introduction of speaker and briefing status

Spokesman for the Prime Minister of Japan Hiroshi Hashimoto: Ladies and gentlemen, we would now like to hold the press conference by Prime Minister of Japan Ryutaro Hashimoto. I would like to ask the Prime Minister to please talk.

II. Prime Minister of Japan Ryutaro Hashimoto's opening remarks

Prime Minister of Japan Ryutaro Hashimoto: I am very satisfied that, under the most outstanding chairmanship of President William Clinton of the United States of America, we were able to have a very close and meaningful exchange of views amongst the eight leaders here in this wonderful Denver, blessed with a nice climate, at the foot of the Rockies. We have been able to cover very wide ground, and as representative of Asia, I would first like to touch on Cambodia, Hong Kong and China, the Korean Peninsula, Bosnia and the Middle East. Namely, I would like to report to you on discussion on these regional situations. Especially with regard to Cambodia, as you know, tensions have been rising these days. In view of that, I proposed on the occasion of this Summit of the Eight that we work on Cambodia as the Group of Eight for its political stabilization. If we can have the concurrence of the participants, I should like to send the Japanese Prime Minister's envoy to Cambodia in order to contribute to further improvement of the situation. I was blessed with the concurrence of my colleagues, and with the support of France, we will be sending joint envoys. In Hong Kong, we arrived at a common recognition amongst the Summit Eight that it is necessary to maintain prosperity and stability even after handover. As for China, I stated that it is necessary for us to build on the spirit of Japan-China friendship and support this current reform and opening-up of China, and by so doing, it will be necessary to further solidify the status of China as a constructive partner of the world community by achieving as early as possible the World Trade Organization (WTO) accession criteria etc. As for the Korean Peninsula, I stressed that the situation on the Peninsula will carry major significance for the peace and stability of the international community as a whole. Secondly, in the area of economic and global issues, as part of the idea to translate into reality the Initiative for a Caring World that I proposed at Lyon, we had on the agenda the items of aging and infectious diseases as well. I said that we should do away with this fixed idea that the elderly are a helpless existence relying on society, but rather we should build on the concept of active aging. We must try to put in place an environment that will enable the elderly to participate in society in various forms through employment, and I stressed the importance of reform that will enable sustainable social security systems to exist alongside economic activity. In the area of infectious diseases, also I stressed in addition to the improved capacity-building for monitoring emergency responses, that Japan should like to take this up at the Summit meeting the year after next, with Japan playing a central role in carrying out discussions on the ways and means to come up with measures against parasitic diseases, taking into consideration the present situation around the world, and building on Japan's experience in controlling them in the past with the cooperation of the World Health Organization and other participating countries. There are about 3.5 billion people who are infested by infectious parasites, and it is no easy task to solve them, but I think that it is important for us to address them. Thirdly, the leaders sent out a political message that indicates the Summit leaders' determination on the importance of global environmental issues, as well as on the need to strengthen international cooperation on these issues in order to attain success at the United Nations Special Session on the Environment, as well as the upcoming Conference of the Parties to the Climate Change Convention that will be held in Kyoto in December. The fact that we indicated our commitment, intention to commit to meaningful, realistic and equitable targets that will result in significant reductions of greenhouse gas emissions by the year 2010 was, I believe, a major step forward. On top of that I also stressed the importance of environmental education, and also proposed a green initiative that will promote the development of technology for the prevention of global warming for the medium- and longer-term and also for the transfer of such technology to developing countries under international cooperation. In addition, we have also explained the Initiative for Sustainable Development that will promote the efforts by developing countries to engage in sustainable development. In the fourth area, we had discussions on the policy means that can be taken with regard to development assistance, trade and investment and peace-building with regard to the least of the developing countries, especially African countries that may well be left behind the world economy. I stressed the importance of providing support for capacity-building in Africa in such areas as human resources and institutions, while calling for cooperation by other countries for the second Tokyo International Conference for African Development (TICAD), which will be held in Tokyo next year. I also advocated the promotion of cooperation by the emerging donor countries, especially those in Asia. The fifth area was the macroeconomic situation. I stated that it is a common task of all our countries to work on fiscal consolidation and structural reform, including deregulation, that it is necessary for us to achieve revitalization of our industry and resolve the employment problem through structural reform. I pointed out the increasing importance of trying to stabilize international financial markets, including Asian markets, and shared this common awareness with other leaders. At the same time, I introduced to them the major reform efforts proceeding over six years in Japan, including reforms in fiscal structure, economic structure, etc. Next, we also agreed that with regard to democracy, the further promotion and strengthening of democracy in various parts of the world will lead to strengthened peace around the world. In the areas of terrorism and counter-terrorism, I explained the experience of the Peruvian incident and renewed my determination that we shall fight against terrorism with the international community, with the conviction that we should not succumb to terrorism. On top of that, I stressed the importance of strengthened counter-terrorism with emphasis on hostage-taking incidents, and proposed the holding of an experts' meeting, with the hostage-taking cases as the main agenda on the agenda, which was supported as an idea. In order to work on international organized crime, which is increasingly challenging against high-tech and computers, it is becoming increasingly important to strengthen our international cooperation. Last, having President Boris Yeltsin of the Russian Federation amongst us, it is notable that we for the fist time had Russia as a full member in the form of a G-8. We very much hope that Russia will continue to accelerate its economic structural reform, and increase its contributions as a constructive partner of the international community. The meeting I had with Mr. Yeltsin on the wings of the Summit Meeting had an atmosphere that was in many respects much better than previous meetings, and I believe that we saw eye-to-eye on complete normalization of Japan-Russia relations. Thank you very much.

III. Future participation of Russia and China in the Summit process

Q: I would like to ask the Prime Minister on the prospect of a future summit meeting. Russia, from the next summit meeting, may participate in economic sessions, so they may be a full-fledged G-8. What is your view sir? And also, on the possibility of the participation of China at the Summit Meetings, can you give me your views on that?

Prime Minister of Japan Ryutaro Hashimoto: Paragraph 2 of the Communique will clearly explain the point. I think we were able to have very good discussions with the participation of Russia, and as was expressed in the Communique, I believe this format will continue. However, when it comes to international economic issues involving currency issues, macroeconomic issues, trade and development, and certain other things, I believe, for some time to come, we shall continue to maintain discussions among the seven. You also referred to the Peoples's Republic of China. In the Summit process to date--of course you will find no reference to it in the Communique this time either--there has not been any discussion on China's participation in the Summit and we have neither received any indication of intent by China to participate in the summit meeting as far as I am aware. Having said that, of course, we have engaged in cooperation with China over the years at such fora as the Asia-Pacific Economic Forum (APEC), ASEAN Regional Forum (ARF), and the United Nations among others. We believe it is important that China continue to play an increasingly constructive role in the international community by achieving early accession to the World Trade Organization (WTO). I think that is what we very much hope for. Hong Kong will be handed over to China on 1 July 1997 and this certainly will be a major historical event, not only for China, but also for the rest of the world as well. I very much hope with the handover of Hong Kong, by maintaining a one country two systems formula, this handover will be an important occasion for China to take on an increasingly important role for the world community.

IV. Issues regarding the trade imbalance

Q: My question involves the trade imbalance. Japan is Colorado's largest export market hitting nearly US$1 billion in goods last year. But, with such a huge trade imbalance looming and proposals for change in the Japanese economy already proposed and implemented, will we see changes in the economy there and a reduction in that imbalance before it begins to hurt our economy and trade here?

Prime Minister of Japan Ryutaro Hashimoto: What I would first like to say is that Governor Rohmer of Colorado is well known among us as a friend of Japan's. Also, just the other day, when Mickey Kantor called on me, he gave me a uniform and cap of the Colorado Rockies. He suggested that if I wear them when I arrive in Denver, I would become extremely popular here. It is true that the Rockies have well-known players such as Walker, Andres Galarraga, Dante Bichette and so on. It just happens that tomorrow the Rockies will be playing against the Los Angeles Dodgers. The starting pitcher on the other side will be Hideo Nomo. It is hard to say here, but we would certainly like to root for Nomo. I hope you will forgive us for doing that. Coming to your question, it is not that I do not understand what you are trying to suggest for the state of Colorado--that Japan is the major trading partner. That is certainly a fact. If we glance at the numbers I have, I can see that between the years 1993 and 1995, Japan imported mainly high-tech products from United States. In other words, looking at the states' exports to Japan, it amounted to about US$540 million. An increase of 54 percent, whereas imports from the United States, as a whole, during the same period was percent. So, there has been a notable increase. There has been a lot of high-tech industry such as Silicon Mountain -- if you will pardon the name -- and you also have resource-based industries such as the food and coal industry. But, in terms of food, I would not say rattlesnake is something that would be much in demand, although buffalo is okay. As we look ahead, we certainly hope for increased trade with the Untied states as a whole and with the respective states. As was reported by the Denver Post yesterday, there are about 70 Japanese companies in Colorado. So, in that respect, Colorado is doing well and we would like to maintain that pace. That is what I would like to tell you. In addition, let me say one other thing. My last visit to Colorado was to go to Estes Park. I love mountain climbing and I want to go up to the Rockies. The Japanese love this part of your country, and the city of Takeyama, blessed with beautiful mountains and water, is the sister city of Denver and I hope that you will value that relationship. I am sure that will lead to favorable results for the both of us.

V. Japan-Russia Summit Talks

Q: Mr. Prime Minister, at the very end of your initial remarks, you mentioned about the Japan-Russia talks. Is there any possibility that there will be a Summit Talk between Japan and Russia within this year. This is my first question. The second question is that President Clinton seems to be supporting Japan very much. Is there a possibility that the U.S. Government or President Clinton is trying to mediate between Russia and Japan.

Prime Minister of Japan Ryutaro Hashimoto: This time I had an extremely candid exchange of views with President Boris Yeltsin of the Russian Federation. We said that building on the Tokyo Declaration, the two of us must try and move Russo-Japanese relations even one or tow steps ahead. I think the Russian President responded very positively. I would very much like to cherish this relationship and in that respect I certainly hope the king of opportunity you are referring to will become reality as soon as possible. When will I be able to visit Russia? We agreed this time that, in principle, we should meet once a year and we would like to try to coordinate our schedule through diplomatic channels. Another point, if President Yeltsin has an opportunity to visit the Far Eastern part of Russia, then perhaps I might take a weekend off to visit Far Eastern Russia and perhaps we might engage in very serious exchange of views. In response to that, President Yeltsin responded very positively to that proposal of mine. Of course we need to coordinate our schedule, as I said, but I believe we will be able to have an exchange of views before the end of the year. I passed Minister of Foreign Affairs Yevgeniy Primakov of the Russian Federation somewhere and on that occasion I also asked him for his cooperation to realize that sort of opportunity whenever it is possible. Coming to the territorial issue, this is an issue that must be settled bilaterally, and during the summit meeting this time, I congratulated this opportunity of welcoming Russia as a member of the G-8 and I said that everyone is aware that there exists an issue between Japan and Russia that needs to be resolved. But, both of us, President Yeltsin and I, have agreed that we, with responsibility, will try to tackle these problems but I very much hope other members of the G-8 will give their support to these efforts made by Russia and Japan. Other leaders also very gladly expressed their support and promised their cooperation. I very much hope with their support we will be able to resolve this territorial issue as early as possible as well.

Q: Mr. Prime Minister, if I could return to the trade issue. The G-7 has expressed its desire to avoid a significant increase in Japan's current account surplus. I am wondering with the current matrix of foreign exchange rates how conducive is that to achieving that goal?

Prime Minister of Japan Ryutaro Hashimoto: Well, you asked about current account. I am not trying to evade the issue. I want to pinpoint the issue. Therefore, I would like to discuss in terms of the trade surplus as a percentage of GDP. Trade and services surplus back in 1996 was 0.5 percent for Japan. Among the group of seven, Italy had the largest surplus with 5.3 percent, Canada with 3.2 percent, France with percent, and Germany with 1.2%. Japan figure was 0.5 percent, so I hope you will bear these numbers as well. It is true that in April and May, Japanese trade surplus increased significantly. But, there was one peculiar factor that April and May immediately followed increase in the consumption tax rate. I have intention on passing on responsibility but the big three had strikes and perhaps some Americans consumers may have purchased cars produced by the Big Three if they had not suffered those strikes, but consumers instead may have purchased Japanese made cars and I hope that you will recognize that temporary factor as well. Having said that, speaking in terms of Japanese trade and services balance, Japanese manufacturers are expending their local production and activity and also with the structural reform proceeding in Japan, they have been decreasing since 1994. Again, in terms of comparison with other G-7 countries, I hope you will recognize that among the five, Japan is the lowest, and I do not think that this trend will change. There may be some short-term fluctuation, but in the medium term, I do not think that Japanese trade and services surplus will increase significantly. People in my position are not supposed to speak to the exchange-rate level. Having said that, I wish to also tell you that even if the yen strengthens or weakens relatively, we will not be able to accept or tolerate extreme cases. If exchange rate levels shift around extremely, that is not something we can tolerate.

VI. Carbon dioxide emissions

Q: I would like to ask an environmental question. In the communique which was announced today, the heads of government state on the question of global warming that CO2 reduction will be implemented for the years beyond 2000. How should it be targeted? Certain countries have come up with definite target numbers to which to commit themselves on the reduction of CO2 or other greenhouse gases. What is the position of Japan? And if the Prime Minister can share with us, what was the atmosphere or mood at the Summit Meeting? Are you to commit to some targeting by the year 2010? With this communique, what will be the position of Japan from now onwards?

Prime Minister of Japan Ryutaro Hashimoto: Let me correct one part of your question. Having serious discussions and falling out on each other are different. And also, not just in relation to the Climate Change Convention, but also on the preservation of the forests, the water and so on -- on various aspects of the environment, we certainly had very serious discussions. It is to that extent that all the leaders are very much concerned about and interested in the environment. At the present stage, with regard to the conclusion part of the convention on climate change, you have got to say what level of reduction there should be of greenhouse gases. I must say there is no single position of the Eight. There is one point, though, where we see eye-to-eye, and that is by the Third Conference of the Parties to the UN Framework Convention on Climate Change to be held in Kyoto later this year, we should come up with feasible and equitable agreement that we must set ourselves clear-cut targets. That has been confirmed as our common position. As indicated in the Communique issued this time, the Summit participants must go beyond their differing interests and must come up with meaningful, realistic and equitable targets that will result in the reduction of greenhouse gas emissions by 2010. The UN Special Session on the Environment will be starting tomorrow. This is a message that we are sending to that Special Session as well. Most of the leaders who participated in the Summit this time will be moving to New York either today or tomorrow and will be participating in the U.N. Special Session. Although we have differing positions, we respectively will be expressing our strong determination to come up with such a clearcut conclusion by the Third Convention of the Parties. Japan will be the host of that conference in Kyoto. We will build on this communique and the strong determination that will be expressed at the Special Session starting tomorrow by other countries as well. We shall be doing our utmost for the success of that conference. We only have several months remaining in the run-up to that COP III, but we believe that instead of simply letting the numbers gain their own life before the conference, we have to consider fairness and also the trading of the emission rights and so on and also must come to agreement on the target years as well. We as the presiding country must work on those various aspects as well. So it is from that vantage point that I engaged in discussions yesterday and today, and beyond our differences we have put together our wishes and we came up with this show of strong determination. I myself am gratified by this.

VII. Isahaya Bay

Q: Mr. Prime Minister, tomorrow you will address the United Nations Special Session on Sustainable Development, and there is a well-known saying that actions speak louder than words. Many allege that you have violated the spirit of sustainable development recently, by draining Isahaya Bay, an internationally important wetland, in the face of the largest environmental protest in Japan's recent history. Why therefore should the international community take seriously your statements on sustainable development?

Prime Minister of Japan Ryutaro Hashimoto: To what extent have you researched the subject matter before asking that question? Now, in that area is a highland. Have you researched how many floods have occurred and how many lives have been lost and how many rice paddies and fields have been lost? To what extent do you know about the history? As background, this project was planned and today the project has reached the level of closing the water flood gates. This will reduce by about 7 percent the tide land. It certainly will have some impact on the wildlife on the tide land. There is a representative fish by the name of mutsugoro, a fish that jumps. It is well-known among the Japanese as well that over the years the population of these fish has increased significantly. In other words, throughout the entire tideline, this species of fish has increased in population. I hope you will note that. If I might also make one other point, birds, especially migrating birds, use this tideline to rest. People worry that the resting place for them may be reduced. The Environment Planning Agency has studied this matter. The birds that used the tideland have now moved to neighboring paddies and fields; that is the report that I have received as well. Of course, these surveys and research will continue in the future. I think that is the nature of the issue as well, that we will have to continue with our research. When heavy rains fell quite recently, there were areas and houses that would have been covered by floods in the past which were not damaged at all because of the flood gates and I hope you will take into account this fact as well.

Spokesman for the Prime Minister of Japan Hiroshi Hashimoto: Ladies and gentlemen, we would now like to close the press conference by Prime Minister Hashimoto.