Mr Major’s On the Record Briefing in Tokyo – 19 September 1993
Below is the text of Mr Major’s on the record briefing, held in Tokyo on Sunday 19th September 1993.
PRIME MINISTER:
[part of the questions and answers were inaudible, and those sections are marked by …]
I much admire the fact that you all speak English since I have to tell you my Japanese is non-existent, but thank you for that helpful fact that you do, but nonetheless I will take things quite slowly rather than gabble in our usual British fashion in the hope that that will be a little easier.
It does not seem very long ago that I was here for the G7, just a few weeks ago, but I am delighted to be back, I am looking forward to seeing the Prime Minister tomorrow and other colleagues and discussing the things that have happened since the G7 and more relevantly the things that are happening now and are going to happen in the future, there are a number of very important joint interests that we have.
If I could just say a word about trading and political relationships. I think our political and economic links at the moment are better than they have been at any time that I can recall, they have grown very substantially over the last 10 years or so. Politically there are the bilateral links through the G7, there are a large number of bilateral contacts, there is a great deal of contact between us on international issues and I have no doubt that will continue.
On the trading front we have a very substantial trade flow in both directions and a very substantial investment flow in both directions. I have brought with me on this occasion I think possibly the most high powered British business delegation ever to leave the United Kingdom together and I brought them to Japan because of the very substantial trade relationship that there is between us and frankly the excellence of that relationship. The companies that have come are all very large companies indeed and I think in their own fields they are amongst the world leaders. I emphasise that not just to praise companies but because it is a very clear illustration of the importance of the trade relationship.
We have been delighted to receive a very substantial amount of Japanese investment in the United Kingdom, there is no such thing in the United Kingdom as a Japanese company, there are companies with Japanese owners in the United Kingdom but we regard them as British companies, they are treated as British companies and we extend their interests across the whole of the European Community in precisely the same way as if they were British owned. I think that has been most evident of course in the motor car industry but it applies generally, it has done in the past and it will do in the future. Despite the scale of our trade and investment relations there is room for further growth and I hope we will see it.
Amongst the things I hope to discuss with the Prime Minister in particular tomorrow, but also I think with others, is the necessity, not lust the wish, but the necessity to reach an agreement in the Uruguay Round this year. Many people in the past have questioned whether: there really is a deadline this year and whether, if we miss it, as we have done before, we can just go on to a later date. I must say I do not believe that we can, for a range of reasons I think this deadline of 15 December is a deadline and if we are to get a comprehensive agreement then we will need to reach that agreement by 15 December. I think that is very much in Britain’s interest and very much in Japan’s interest, we are both by instinct free traders but more important than that I think it is very much in the interests of the whole of the industrial and non-industrialised world that we get a satisfactory outcome to the Uruguay Round.
A lot of progress was made when I was last in Japan at the Quad talks and I was very pleased about that. Every country, without any exception anywhere in the industrialised world, is going to have to make some concessions in the GATT Round to reach an agreement, some of them will be painful, some of them will be politically difficult, but the advantage of the overall deal is such that I think every country must do it.
There is, as you may know, some dispute between the United States and the European Community over agriculture and Blair House. I can only tell you the British view, the British view is that the Blair House deal should not be re-opened, it was reached, it should be stuck to and it should not be used as an impediment to prevent the GATT round.
We do have some specific issues on market access that I am likely to raise over the next day or so but I will leave you to ask questions about that rather than specifically mention them, you will not be surprised to hear which ones they are.
I hope also we can look at a range of other international matters, I shall certainly want to ask the Prime Minister, about Cambodia, I am sure we will look at other trouble spots around the world like Bosnia, have no doubt we will exchange our views over Russia and Ukraine and a number of other international problems as well.
I also want to talk to the Prime Minister about deregulation. I was very interested to see in his economic package the other day the proposals for a large amount of deregulation. We are about to produce legislation in the British Parliament for deregulation of business and I think we may well be able to exchange some experiences there.
Just one final word, if I may, about the United Kingdom economy. Economies all round the world have been sluggish and difficult, you have had your own difficulties in Japan as well as we have. We have been through a recession, we are now out of recession, we are starting to grow, our growth this year will be modest but it will be the largest growth in the European Community. Our growth next year will be a good deal bigger and again it will be the largest growth in the European Community.
We have inflation down to under 2 percent for the whole of this year, there is no sign that inflation is going to rise again, there is every sign that gentle and steady growth is going to continue. Our exports are rising quite substantially, our productivity is improving quite substantially. So I think we are in a position with low inflation, low interest rates, declining unit wage costs and accelerating growth and we can look forward to a much more clement economic climate over the next few years than we have had in the last few years.
One thing we will not do is take any risks with inflation, I am determined that we should have steady growth with low inflation for the next few years because I think that is frightfully important for the industrial and commercial development that I hope to see in the United Kingdom.
QUESTIONS AND ANSWERS
QUESTION:
Prime Minister, my first question is the issue of former POWs who have been claiming for compensation from the Japanese government, although Prime Minister Hosokawa made formal … for wartime atrocities of Japanese Imperial forces he said he thought that the case was closed under the San Francisco Peace treaty. When you raise this issue with the Prime Minister will you demand any compensation?
PRIME MINISTER:
It is an issue that is very live in a number of countries at the moment, in Canada you will know the situation in Canada and you will know of the situation in Holland and it is a live issue in the United Kingdom as well. Britain and Japan are very close and friendly partners and I expect I shall raise the matter but I shall expect to discuss the matter in that spirit and I think it is one of those matters where it is best served if the Prime Minister and I discussed that matter privately rather than air that discussion in public, I think that is the right way to enter into the discussions and if you will forgive me I will say no more about it other than to confirm that it is a matter the Prime Minister and I will discuss.
QUESTION:
My second question is regarding the organisation of the United Nations. The United Kingdom seems to be rather … as far as the UN is concerned in that the UN Security Council as it stands has been functioning very well and both Japan and Germany … to send combat forces to the other side of the world. I think you will take up this issue with the Prime Minister, would you change the extent of the policies of the UK vis a vis the UN?
PRIME MINISTER:
I set out some comments on this when I was here in July at the G7. There is a debate on the reform of the Security Council which is now under way, it has been an embryo debate for some time and it has rather gathered pace over the last few months. The key point I think in any reform is to ensure that the Security Council is able to deal effectively with the global security problems that are its responsibilities and all the Permanent Members of course are expected to play a full role in peace-keeping. That debate on the Security Council is not going to go away, it is going to accelerate and you mentioned particularly Japan and Germany, but I think there are other countries as well that will want to play a particular role in that debate, I think it is very likely, for example, if this debate gets under way that the non-aligned countries will also say: Well we should have a Permanent Member as well. So I think the debate is a little wider than just the present Permanent Five and the applicants, there is a very large … from Japan and from Germany.
As that debate continues, if you would like to know my personal view I will tell you. I personally would expect that Japan would benefit from any expansion of the Security Council, I think that will take a while because it is a very complex and difficult debate, it will not be easy to conclude but I think the reform process is now under consideration, it is not going to go away and at the end of it I would expect that Japan would benefit, but I could not put a time frame to that.
QUESTION:
Could you tell me how the Russian President … do you think he can survive?
PRIME MINISTER:
Yes I do think he will survive, he is a pretty robust character the Russian President, I believe, you may correct me, but I think there are plans for him to visit Tokyo at some stage in the future. There have been a number of occasions in the last couple of years where people have said: Is the Russian President going to survive? He has, he is an extremely robust character. Three or four years ago when President Gorbachev was there, there was always the alternative in the wings of a putative President Yeltsin, no such immediate alternative is there. Clearly he is going to have a lot of very difficult decisions to take, he is going to have a lot of opposition and a lot of criticism, but I do believe he will be able to overcome that, quite how he is going to handle the constitutional difficulties he faces with elections later this year or perhaps next year I cannot tell you, but if you want to know my hunch as to whether President Yeltsin will be there in 12 months time, my hunch is yes he will.
QUESTION:
[Inaudible].
PRIME MINISTER:
I think there are two points, quality coordination is one; I think the other point reverts back to a topic of a few moments ago, if one asks oneself what is the single ingredient that the world economic situation lacks at the moment I suspect the answer that most people would give you is confidence, people are not confident about the sustained economic period of growth in the future. And what is the single ingredient that is most likely to engender confidence? I think I would argue quite strongly that the single ingredient most likely to engender confidence is a satisfactory completion of the Uruguay Round, I think that would make a very powerful difference.
On the question of the European Community you are absolutely right, the United Kingdom is out of recession but a number of the other European countries are going into recession. I do not know how long that cycle will last, there are two views in Germany, Germany is the most powerful economy in Western Europe, one view is that the Germans will be coming out of recession in a matter of months, another that it will be longer. I hope it will be the former view because they, Japan and the United States are the three great powerful motors in the world economic system.
As for policy coordination generally we discussed that at the G7 and I think it was generally agreed what needed to be done – the Europeans need to reduce interest rates, they are starting to do that, events have enabled them, there have been a number of interest rate reductions across Europe, nobody foresees interest rates rising in Europe, they see them declining, that is very welcome indeed. The view also is that we wanted to see a fiscal stimulus in Japan, there has been a fiscal stimulus in Japan and we must wait and see whether that is satisfactory and will … the Japanese economy. And in the United States we want to see continued growth. I do not think the United States is growing as fast as we thought it was a few months ago, it seems to have slowed down, I think that is now becoming clearly evident, but it is still growing.
So the three components that we set out at the G7 are all under way, the United States is growing, Japan has injected a fiscal stimulus and interest rates are declining across Europe. So I think that is the first time for 3 or 4 years that each of the three economic blocs have got policy moving in a direction that will engender growth and I think that is welcome.
QUESTION:
[Inaudible].
PRIME MINISTER:
I am a multilateralist rather than a bilateralist and I want to see multilateral deals and multilateral growth, not bilateral growth, I think that is very clearly what my view is.
QUESTION:
[Inaudible].
PRIME MINISTER:
The International Olympic Committee will decide on Thursday I think, all the bidding has pretty much been done. I very much hope that Manchester will get it. A year ago many people would have said Manchester was an outsider, I do not believe they would say that today, the Manchester bid is a very powerful bid now and I think we have every chance of winning on Thursday but whether we will or not, who can tell. As for Beijing, I will just restrain myself to saying Beijing is not my choice.
QUESTION:
[Inaudible].
PRIME MINISTER:
I am not going to raise the issue in public now, I am going to discuss it with the Prime Minister. I think this is the sort of matter that is most likely to come to a satisfactory conclusion if it is discussed privately, I do not believe in what one might crudely call diplomacy by megaphone, if I have something to say I prefer to say it privately, you may regard that as a novel British approach but it is very much the one that I prefer. So without wishing to be discourteous, if you will forgive me I will reserve what I have to say for my private meeting with the Prime Minister,
I am sorry not to be more forthcoming.
QUESTION:
Turning to European issues, the European Monetary System has virtually collapsed, as one of the main artists to the Maastricht Treaty do you think that the European leaders should be … of the European declaration.
PRIME MINISTER:
Are you talking about the Exchange Rate Mechanism or full economic and monetary union?
QUESTION:
I understand that the European Monetary System is the cornerstone of the future economic and monetary union, in that sense if you look at the confusion of the monetary system …
PRIME MINISTER:
When the Chancellor came out of the Exchange Rate Mechanism I said then that I thought there were serious fault lines in the Exchange Rate Mechanism, I still believe that, I believe there are serious fault lines and until those serious fault lines are put right there is the danger of the same sort of difficulty again. The Exchange Rate Mechanism for some, not all maybe, but for some would … towards full economic and monetary union and a single currency, the timetable was set out for achieving that. My view quite clearly is that that timetable is no longer remotely realistic, not remotely realistic, and my fellow Heads of Government in the European Community know that is my view. At the time of the Maastricht Treaty I declined to accept the full economic and monetary union proposals of my colleagues, I had what was known as an opt-out so that the British parliament could decide at a future date if it wanted to go into economic and monetary union. I believe that the events since Maastricht have proved that that judgment of mine was right and I personally do not consider the timetable set out in Maastricht, to which some still hold, to be remotely realistic.
QUESTION:
[Inaudible].
PRIME MINISTER:
In terms of timescale, most certainly, and I think in other ways too, yes. I think one can see looking around the European Community, I think there are other more pressing issues that the European Community should turn its mind to and I shall be trying to persuade them to turn their mind to What should be bothering people in Europe most is how to re-engender growth and create jobs. In the European Community there are 17.5 million European adults out of work, that figure is going to go up in the next year or so to around 20 million adults. That is an astonishing figure in an industrial society. In Japan mercifully you have not had serious unemployment problems for decades, but 20 million unemployed is not a problem that will be solved by long distance … monetary union, the European economies have got to look at the much shorter problem of how to engender sufficient growth, to have sufficient deregulation to put people back to work.
I think there are three things they have got to do: they do need policies that will engender growth without inflation; they do need to deregulate, the European markets are much too heavily regulated, the United Kingdom is perhaps the least too heavily regulated and yet I believe we are over-regulated; and the other problem in Europe is their social costs are infinitely higher for companies than social costs in Japan, in the Pacific Basin or in the United States and the European Community, if it is going to thrive in the long term, has got to realise that it is not a question of France competing with Germany, competing with Spain, competing with Britain, it is a question of the whole of the European Community competing with Japan, with America and with the rest of the world so they have got to cut their social costs as well and those are the issues I believe they should concentrate on.
QUESTION:
My last question is regarding what you said in your opening remarks, when you said … need assistance to bring around a successful conclusion of the Uruguay Round, does it mean that you are going to say to Prime Minister Hosokawa …
PRIME MINISTER:
We will certainly discuss all the outstanding elements of GATT, all of them I would think, and I daresay that Prime Minister Hosokawa will say to me that I have got to make sure the European Community … some gains over agriculture too, I would expect him to say that and I will agree with him about that. But I will raise the GATT Round, some things we will deal with specifically others generally.
QUESTION:
[Inaudible].
PRIME MINISTER:
I have no recent information, one has seen all the rumours there have been of Scottish lawyers being briefed by Qadhafi but I have nothing concrete on that that I can confirm, I very much hope so, I think it is necessary that the people who are believed to be responsible for this atrocity should face trial and find out whether they are guilty or not and the sooner that happens the better and I very much hope such a trial will take place.
QUESTION:
[Inaudible].
PRIME MINISTER:
It is possible but we do not know yet. It is perfectly possible for a trial to take place in Scotland but in order for that to happen the accused have to be delivered up by the Libyans and I do not yet know whether that is likely to happen, I hope it will, we have not heard.
QUESTION:
You have no hard evidence?
PRIME MINISTER:
We have no hard evidence at all, we have seen the reports that you have seen but as is sometimes the case in the world you are as well informed as we are and I have no hard evidence at all.
QUESTION:
[Inaudible].
PRIME MINISTER:
I will, I am stopping in Kuala Lumpur en route and then I am going on to Monte Carlo and I look forward to seeing you all in Manchester in the year 2000.