The Rt. Hon. Sir John Major KG CH

Tag: GATT

  • Mr Major’s Speech in Tokyo – 20 September 1993

    Below is the text of Mr Major’s speech made in Tokyo to the Nikkeiren Economic Organisation on Monday 20th September 1993.

    PRIME MINISTER:

    It is a very honour to speak today to this distinguished audience and a very great pleasure to be back in Tokyo. I was last here only ten weeks ago for the Group of Seven Summit and I am delighted to have the opportunity of returning so soon.

    A western traveller many years ago in 1876 arriving in Japan was impressed. It was, he said: “Like mental oxygen to look upon and breathe in a unique civilisation like that of Japan.”

    “Mental oxygen” is a good phrase; it suggests a new way of seeing things, a new way of doing things. What was true at the start of the Meiji era is true at the start of the Heisei era. Every European who visits Japan sees the world and his place in it in a different light.

    We approach challenges in a different way. British mountaineers were the first to conquer the Eiger in Switzerland navigating a complex ascent along ridges and up gulleys. Japanese mountaineers were the first to climb the Eiger vertically; it took years of preparation; the ascent took exceptional teamwork and exceptional patience; nobody had ever thought of that approach before.

    Similarly daunting challenges are facing Japan and Britain today. We will go about tackling them in different ways but we will both be determined to tackle them head on.

    Perhaps the foremost challenge in Japan today is political. I have the greatest respect for Prime Minister Hosokawa and what he and his government have set out to achieve. Like any elected politician, he believes fervently in parliamentary democracy. I welcome any effort to keep politics in direct touch with the wishes of the electorate; it is an aspect in government which some in Europe in the last few years have sometimes underestimated.

    But today I want to talk about the purpose of my visit to Japan. I want to seize the opportunity to inject new energy into Britain and Japan’s partnership; I want to extend it into new areas and I want it to become a true strategic partnership.

    Already we are in close in touch about the great international issues. We are both strong supporters of the Middle East peace process; Britain and Japan are both ready to help follow-up in the historic accord between the PLO and Israel; we have worked together as part of the successful United Nations operation in Cambodia and tackled together the threats to our, planet’s environment.

    I warmly welcome Japan’s growing involvement in the maintenance of international peace and security. The world needs not only your financial contributions but also your peacekeepers and a confident political voice. I know there is keen interest in Japan in the United Nations Security Council. The effectiveness of the Council must be paramount but if there were to be consensus on enlargement I have no doubt that Japan, by virtue of its global interests, its contribution to international security and its contribution to United Nations peacekeeping, could undertake the full range of responsibilities of a permanent member and should certainly benefit.

    One of your great reformers last century wrote:

    “When I was twenty I knew that men were linked together in one province. When I was thirty I knew that men were linked together in one nation. When I was forty I knew that men were linked together in one world of five continents.”

    That encapsulates well, I believe, the spirit that we need today.

    We need the closest possible contact between our two peoples. Two great cultural festivals – UK90 in Japan and the remarkably successful Japan Festival 1991 in Britain – have brought our two peoples together. Sumo and karaoke are now as well known in London as Gary Lineker is in Tokyo but I want to do a good deal more.

    I am therefore delighted to announce that a new scholarship programme called “The UK-Japan New Century Scholarship” is being set up for your best students at Oxford, our great university. Mr. Hosokawa and I will announce a high-level conference in London in January on Japan-British relations. Tomorrow, I will meet some of the British and Japanese scientists who are already working together and next week the British Minister for Science will visit Japan to look at the scope for deepening that important scientific cooperation.

    On this visit to Japan I have brought with me twelve of our most senior businessmen whose companies without exception are all taking a strategic approach to this market. We now sell more here than to any country outside Europe and North America. British direct investment in Japan now approaches 3 billion dollars, half of it made in the last two years. That is good but we aim to do much better. Japanese companies – your companies – have invested heavily in Britain. In doing so, you have changed the way we work. The Nissan plant in Sunderland is now their most efficient in the world. Our car components industry has performed so well Toyota has brought forward its target date to achieve 80 per cent local content by six months.

    We work hard in the market and we welcome you into ours. That is not always a popular policy. We need your cooperation if we are to show critics that this positive, open policy is, as I profoundly believe it to be, the right policy.

    I am therefore delighted by the emphasis which Mr. Hosokawa is putting on deregulation and on structural reform. I hope that his government will also move decisively to stimulate domestic demand; that would help trade and help living standards and I think it would bring benefits to the peoples of both countries.

    I hope you will also be able to take other measures to open your markets. You surely have no need now for tax discrimination against imported spirits; it cannot be in your best interests to maintain lingering barriers in other sectors, including financial services. British companies should have every opportunity to compete on equal terms for large contracts in sectors like aerospace. The Keidenren has issued some very welcome guidelines on open purchasing and I am sure more Japanese companies will apply them internationally and I welcome that unreservedly.

    For over a decade, the British Government has pioneered deregulation and open economic policies. My predecessor, Margaret Thatcher, began to reshape the British economy by revitalising old and sleepy public monopolies and opening them up to competition. Sixty per cent of what were in 1979 public corporations are now privately owned; they employ almost one million people. During the Eighties, we were the world’s second-largest overseas investor; many of those investments come from those giant British companies freed from the shackles of nationalisation.

    European economies like your own have been going through turbulent times; currency crisis and recession have hit us all. But Britain is among the first to find its way out of the gloom, Inflation is staying low, well below the European average and we intend to keep it that way. Our economy is growing again and GDP is forecast to continue on an upward path. Industrial production is up. GDP and retail sales are up, productivity is up, very sharply up indeed. Unemployment is still too high but has come down this year. The tough decisions that we took are now paying off and recovery is proceeding across a broad front.

    Other European economies will follow; there is light ahead at the end of this recessionary tunnel but this must not, I believe, be the blinding light of excess ambition. The countries of the European Community must learn from their mistakes and not forget their mistakes. The fault lines in the Exchange Rate Mechanism produced a salutary shock. Of course we should seek ways of promoting economic convergence and greater currency stability in Europe and beyond but we should not believe that the creation of institutions or the declaration of grand intentions will produce miracles. The Community must proceed at a pace which carries the support of Europe’s 370 million people. We must welcome new members to the Community when they are ready to join it. We must take account of the national identity, old cultures and proudly-held traditions of all of Europe’s members. We must build on our strengths trade, the rule of law, democracy – recognising that the Community is the best instrument we have for securing the peace and the prosperity of Europe.

    The European Community should do well what it can do. We strongly supported the creation of the Single Market. We insisted that it be an outward-looking creation. We must make sure it works from Sicily to Scotland. We insisted that cars produced in Japanese-owned factories in Britain enjoy the same access to the market as any other European cars.

    Mr. Chairman, the European Community must also help negotiate a global agreement on trade – the Uruguay Round of GATT, European Ministers meet later today in Brussels to coordinate their position but it is the Commission of the EC – in the person of Sir Leon Brittan – which negotiates on our behalf. We have full confidence in the Commission in this important task and we believe they should be left free to get on and negotiate a settlement.

    An agreement would inject a powerful stimulus into the world economy as markets enlarge and opportunities to trade at lower prices open up. That means growth in our economies, it means growth in jobs. It is hard to make precise calculations of the effects but respectable estimates put the extra income generated in the hundreds of billions of dollars. That growth will happen without the inflationary pressures which come with just about any other form of stimulus; there will be millions of new jobs.

    There are of course still seductive voices urging us in the wrong direction, preaching trade regional blocs. The GATT deal is too difficult, they suggest; it runs against the interests of our citizens, they suggest; our citizens need increased protection, not increased exposure, they say; our cultures, our social traditions are at stake, they say.

    I must say to this luncheon today that those voices are wrong and those voices are dangerous. Protectionism provokes retaliation and escalation; it leads to trade disputes and politicises economic relations; it acts as a hidden tax, raising prices and with them wage pressures; it handicaps efficient producers by raising their costs.

    Peter Sutherland, the GATT Director-General, wants a deal in December. So does Britain. So, I hope and believe, does every one in this room today and I hope that feeling is extended right across the five continents.

    Britain’s partnership with Japan is a key relationship; it works well and it will continue to do so. Japan also lies at the heart of our strategy towards the most dynamic region in the world. Japan has shown the way, through its enterprise and the industry of its people, to a new regional prosperity. Asia as a whole is enjoying spectacular economic growth, old controls are being abandoned, market based freedoms introduced.

    This growth is being translated into new and burgeoning markets, into flourishing two-way trade and investment, into a new weight for Asia in world markets for capital and equity. Economic and social development are leading in turn to greater diversity in people’s lives, to increased choice, to more open and more democratic societies.

    Political voice comes from economic choice. From South Korea to Thailand, people are gaining more say in their own government. The trend is unstoppable, as it has been elsewhere in the world; it is natural, it is right and it will underpin stability; stability founded on the rule of law – civil law as much as criminal law. In a democratic society, no-one can be above the law.

    All this adds up to a substantial shift in the balance of global forces. Asia is acquiring a greater capacity, a greater will to shape the issues on the world political and economic agenda. Asian countries are increasingly involved in United Nations peacekeeping not only in Cambodia but also further afield. Asian governments increasingly discuss among themselves and with their partners the sources of potential instability in the region as well as its potential for nuclear and conventional proliferation. New regional frameworks for economic and security dialogue have been born.

    We in Britain acknowledge the importance of these perspectives and developments. Britain has long been present and active in Asia. The first Englishman arrived in Japan nearly 400 years ago, took a Japanese wife and was in part responsible for the creation of the Japanese navy; other British citizens were already trading and exporting nearly everywhere else in Asia.

    Today, we have a wealth of traditional connections with Asian countries, ties of sentiment, language, cultures and blood. History has, for example, given Britain a special responsibility for Hong Kong. Our aim is to ensure that Hong Kong’s success will continue into the new century founded on the concept of “one country, two systems” and underpinned by representative government and the rule of law. I know it is well understood here in Japan how important a role Hong Kong has to play in the region’s future prosperity.

    History is therefore what you make of it. I am proud of all we have built on our forefathers’ fascination with Asia; the legacy goes well beyond commercial success. There is the excellence of Asian students at British universities; the curiosity of our young people – nearly 700 are here for example on the Japan English Teachers Scheme; the impact which the BBC World Service Television has made in Asia and I am pleased that it is coming to Japan next April.

    We are today determined to give Asia a new place in our national priorities; we plan to deepen our involvement and our presence in Asia.

    First, we seek a closer political dialogue with Asian governments. I have spoken of the breadth and excellence of our exchanges with Japan. We also welcome moves to establish new regional frameworks for economic and security dialogue; we are ready to contribute to that dialogue in any way which would be helpful.

    Second, we are seeking a still stronger commercial presence. Already in the Asia Pacific region Britain is the largest European investor, the largest European exporter of invisibles, the second-largest European exporter of goods. We shall do even better in future.

    Finally, we are seeking, Mr. Chairman, fuller cooperation with Asian countries as they join us in tackling regional and global problems. We believe that our membership of the key international organisations, our military expertise and our experience of conflict resolution well qualify us to help. Your Ambassador in London was kind enough to publish an article praising our diplomatic skills – perhaps partly as evidence of his own diplomatic skill in observing that in his host country! But we do believe that we can help Asia as Asia helps the rest of the world.

    But there is no doubt that the problems of this small world increasingly affect us all in Asia and in Europe. Who, I wonder, one hundred years ago here in Tokyo would have thought how important peace in the Middle East would be to Japanese business? Common problems demand common responses: British people and Japanese people together in the United operation in Cambodia, together in car factories in Britain, together in finance houses in the City of London and together in aid projects in Africa.

    Not unnaturally, we can come at the same problem from different angles. Europeans and Asians have always done that but I think as we do so, we produce better solutions for it. If you look at an object with one eye, you can see it clearly but with no sense of perspective; only with two eyes can the real shape of things be understood. I believe that together we can combine the best of two worlds and start the twenty-first century in good shape and in increasing friendship and it is therefore, Mr. Chairman, with that in mind that I would also, if I may, invite this distinguished audience to join me in a toast; it is a simple toast but a heartfelt toast and I hope you will feel able to join it. The toast, Mr. Chairman, is simply this:

    Good relations between the United Kingdom and Japan; may they remain good and improve! Relations between the United Kingdom and Japan [Applause].

  • Mr Major’s Press Conference in Tokyo – 20 September 1993

    Below is the text of Mr Major’s press conference in Tokyo, held on Monday 20th September 1993.

    QUESTION (Sanke Newspaper):

    It is indeed a great honour for me to ask the first question. My question is as follows. There are discussions to reform the UN Security Council and for Japan to become a permanent member, what is the view of the Prime Minister of the UK, do you think that Japan should become a Permanent Member of the Security Council and if so what conditions should she fulfil?

    PRIME MINISTER:

    We are now engaged I think in what will be a continuing debate about the reform of the Permanent Membership of the Security Council, I think that debate will take a while, there are a number of countries that have obvious credentials, Japan of course, Germany of course, but I think other countries will have ambitions to become Permanent Members of the Security Council and of course to fulfil the obligations that Permanent Members traditionally fulfil. I think that reform debate is now engaged, it will continue for some time.

    The primary concern I think as that debate does proceed is to make sure that whatever the outcome of that debate may be that the Permanent Membership of the United Nations retains the same compatibility that it has at present and is able to act as sufficiently decisively as it can today. It is the effectiveness and efficiency of the Permanent Members that will be primarily in our minds as we look at the question of reform. Clearly the members likely to join the Security Council will need to fulfil the same international criteria that has been the case in the past but I have no doubt that as the debate about the reform proceeds, when it concludes, that Japan is likely to be one of the beneficiaries.

    QUESTION (Japan Economic Journal):

    Ambassador Kistanura [phon] in the newsletter of the Japan Society has written that the Japan/UK relationship has come to a very favourable relationship, unseen in the past, I think in terms of Opportunity Japan, Priority Japan, The Japan Festival, all of these committees have led to such a good relationship. In the eyes of Japan our relationship with the UK is something that we regard highly. In order to further strengthen our relationship what kind of things should Japan do?

    PRIME MINISTER:

    I think as you rightly said the United Kingdom/Japan relationship in trade and economic matters is already very strong. A whole series of initiatives – Priority Japan springs immediately to mind, the large conferences by the UK and Japan and by Japan and the UK – have built up the relationship quite dramatically over the last few years. I think there are two aspects to the relationship: the first is political and the second is economic and trade. If I could say a word about both I would then like to ask Michael Perry to say a word also about the trading relationship.

    Let me touch on the political relationship first. I think that it is self-evident that Asia as a whole is being given a new priority in British policy. It is a time of dynamic political and economic change in Asia and the Pacific and I put that in the general area. But I would say more specifically that Japan is central to Britain’s approach in Asia and our political relationship is closer than it has been for a long time and the relationship between Japan, Britain and other large nations in dealing with international affairs is more effective and more efficient than we have known it in the past and that is going to continue, There is a distinct wish in British foreign policy to give a new priority to our relationship with Japan and our relationship more generally with Asia.

    On trade and economic matters we propose to build on the special relationship that has existed. There has been a very substantial trade flow between the United Kingdom and Japan, the recession of course has affected that, as it has affected every other trade relationship, but it is still growing and British exports, for example, to Japan have grown very dramatically in recent years. That is going to continue. The Prime Minister and I agreed earlier this afternoon that we would have a very high profile conference in London in the early part of January to carry the relationship forward. Richard Needham, the Minister for Trade, and Michael Perry as a businessman with immense experience of Japan and with particular responsibilities, will be looking at how we can carry our trade relations even further and will be making more announcements about that in the New Year.

    So I do not think there is anything new and fresh that I would particularly ask of Japan, what I would ask is that we continue going in the direction that we have been going for a long time. Many of the inhibitions to access to Japan’s markets have gone, some of the cultural inhibitions have not yet gone and there are still some individual areas that I have been discussing with the Prime Minister where we would like some further action. But overwhelmingly we are very pleased with the direction of policy.

    So I think that the relationship will continue to develop and ripen and I would like, with the Chairman’s permission, since I speak upon these matters as a politician, to ask a practising businessman with immense experience of Anglo/Japanese relations, perhaps to add a word on the trading aspects.

    MR PERRY:

    The development of Anglo/Japanese trade relations has been very positive, as the Prime Minister has said, in the last 5 or 10 years. The reason for that of course is in the first place the opening up of the market here and secondly the great cooperation we have had from all involved in the process of identifying markets and bringing the goods and services of Britain to the attention of Japanese buyers. There are of course still a number of areas which we are discussing together, in particular matters of deregulation in the financial and invisible sectors but we know that these are matters which concern Japanese businessmen too and we are encouraged to believe that these matters are being addressed.

    Overall we are concerned as British businessmen that we should be trading together in a multilateral trading system which means that we are judged on the quality of our goods and services, and that is all we ask.

    QUESTION:

    In your talks with the Prime Minister what points did you talk about and which points did you find agreement on in terms of trade and investment related matters?

    PRIME MINISTER:

    We touched on a number of bilateral matters on trade and we shared a view that we must carry the trading relationship forward in the way I described a few moments ago. More widely and. perhaps immediately more crucial for all of us, we spent some time discussing the Uruguay Round and share a determination that that should come to a successful conclusion by 15 December and we spent a very considerable time upon that particular matter. That is an important multilateral agreement that I believe will re-engender a great deal of confidence in the international community, engender an increase in trade and an increase in trans-territorial investment and a creation of jobs and prosperity. So we spent a great deal of time discussing that in particular.

    The converse of course, about which the Prime Minister and I also agreed, was the immense damage that would be done to international confidence and trade were there not to be an agreement in the Uruguay Round.

    QUESTION (Sanke Newspaper):

    Today there will be a joint meeting between the Ministers of Foreign Affairs and Agriculture in Brussels and they will be talking about the agreement on agriculture to which France is opposed, do you think that if the present situation continues the basic agreement could be reached by the end of the year and did you ask anything of Mr. Hosokawa about the opening of Japan’s rice market?

    PRIME MINISTER:

    The meeting that there is in Brussels is a very important meeting, I can express to you the United Kingdom’s view about that very simply and very crisply. The European Community negotiators reached an agreement with the United States at Blair House, we have reached an agreement, we should keep to the agreement, it should not be re-opened and I see no reason for it to be re-opened. That is the view that the United Kingdom takes about Blair House. Agriculture is difficult, self-evidently difficult, but I think it cannot be permitted to prevent the completion of the Uruguay Round on 15 December, it cannot and it must not be permitted to do that so we will have to find a solution to the difficulties of individual members in the intervening period. think there are ways in which that can be done but certainly it cannot be done by re-opening Blair House, that is an agreement that has been done.

    We did not specifically discuss any details from the Japanese point of view of elements of the Uruguay Round but we did discuss the necessity to reach an agreement and Prime Minister Hosokawa made it clear to me that he too favours reaching an agreement.

    QUESTION (Jonathan Annals, Evening Standard Business Day):

    You just expressed your commitment to securing the successful completion of the Uruguay Round, earlier this afternoon Mr Davis from the CBI said that bilateral trade agreements were dangerous and they tended to undermine and perhaps replace multilateral agreements perhaps such as GATT. What is your view of the so-called trade framework talks which began yesterday in Hawaii between Japan and the United States which are intended to increase sales of American products in Japan sector by sector and reduce the trade deficit?

    PRIME MINISTER:

    I share the view that was expressed by Howard Davis of the CBI, what we are looking for is a free trading, multilateral world, that is undoubtedly what is in everyone’s interests, that is what the GATT Round is about and. that must have pre-eminence in our discussions and in our concern. I was not present at any bilateral discussions but if you are going to have a proper free trading system around the world then it has to operate on a multilateral basis and that is and will remain our position.

    QUESTION (John Sergeant, BBC):

    On a domestic matter, could you say whether you are disappointed with the reaction of some of your MPs who appear to have rejected your appeal which you made here in Tokyo yesterday for loyalty to yourself and to the government. One of them said that you were out of touch with the feelings in Britain?

    PRIME MINISTER:

    I am here to look after British interests at home and abroad, to advance the British interests. I do not know which Member of Parliament said that, I do not know in what context he said it, do not know in response to what question he said it, and I think in the absence of knowing any of that I am not going to comment on the remarks of one of over 330 of my Conservative Members of Parliament. I can tell you that the overwhelming view of the Conservative Party is that we have come through the recession, we have now got a satisfactory platform for what we have been seeking for a long time – growth with low inflation. That is a tremendous opportunity for British industry domestically and British industry and the British economy internationally. And it is to develop that that I am here, it is to develop that that the government’s policies are directed and it is to develop that that I believe I will have the overwhelming support not just of the Conservative Party but I think of people right across the country.

    QUESTION (Todo News Service):

    In your talks with the Prime Minister, on specific matters I am sure you talked about individual matters, I am imagining this, could you please tell us what kind of dialogue you had with the Prime Minister concerning individual matters?

    PRIME MINISTER:

    We touched on a very large number of international matters, I think it would probably take between now and midnight to run through all the background and. ramifications of what we covered in our two hour session. But in terms of international matters we discussed China, we discussed Russia, we discussed the United Nations, I touched upon that earlier, we talked about Hong Kong, we discussed a range of matters related to GATT, we touched on bilateral matters, we touched on UN peace-keeping, we touched also on the subject of Prisoners of War, we touched also upon a scheme that we were able to announce today, funded by the British private sector, to take some Japanese post-graduate students from Japan to study at Oxford University in the United Kingdom and we were able to announce that today, we discussed the arrangements for the joint UK/Japan Conference to which we attach great importance, that will take place in January. Later on in the afternoon I discussed with the Foreign Minister a range of Asian matters, Cambodia took a fair amount of our time there. I would not promise you that that is an inclusive list but I think it gives a broad indication of the sort of matters we discussed.

    QUESTION:

    Before you came to Japan we heard that, perhaps emulating President Bush’s visit to Japan, you were bringing a lot of businessmen with you and that you were going into top sales here in Japan, there were such rumours before you came, but in that regard did you have any strong request to make to the Japanese government?

    PRIME MINISTER:

    The British private sector is very able to make its own requests. You are quite right that I brought with me a very high powered delegation of very senior British businessmen and as I said earlier, and I am happy to repeat to this larger gathering, I think probably the most senior delegation of British businessmen ever collectively to leave the United Kingdom and certainly the most high powered delegation ever to accompany a Prime Minister abroad, Michael Perry is the leader.

    We had a series of discussions with the Kadanran [phon] this morning and I have had a series of meetings, of which I think you know. But I suppose the underlying point is this. We are still extremely keen to attract inward investment into the United Kingdom from Japan, I think that has been very successful from the point of the Japanese investor and I can certainly say it has been very welcome and very successful from the point of view of the United Kingdom. I wish to make it absolutely clear that we are happy to see that continue.

    Other than that what we are concerned about, and what Japan is concerned about, is opening up the world trading market so that decisions may be made upon merit in terms of trade, investment and the awarding of contracts, and it was matters relating to that that formed the bulk of our discussions throughout the day.

    QUESTION (Jiji News Service):

    I would like to go back a bit to Japan becoming a member of the Permanent Five, you mentioned that you talked about this with Prime Minister Hosokawa. On your part, if Japan wishes to become a member of the Permanent. Council, what specifically would you request from Japan and in your talks with the Prime Minister did you mention what kind of conditions you would attach for Japan to become a member?

    PRIME MINISTER:

    There would be no specific Japanese conditions that we would expect Japan to follow, what we would expect is that any new members, whomsoever it may be, Japan, others as well if there are other additions, what we would expect is for Permanent Members to be able in principle to play a full role, as have the existing Permanent Members, across a whole range of responsibilities, including peace-keeping, the provision of troops from time to time and finance. So what we would wish is to ensure that the Permanent Members remained effective and to ensure that all the Permanent Members were able and prepared to undertake the same responsibilities that the present Permanent Members could take.

    But we would not be asking for any special or different responsibilities from any new applicant, whether Japan or anyone else.

    QUESTION:

    Given your strictures about the silly and stupid noises off about your leadership that you have been saying here, do you think it was a politically wise judgment for the Chancellor to actually pull a rabbit out of the hat about a leadership campaign going on in London involving himself, the Home Secretary and Mr Portillo? There are suggestions that you feel lonely and isolated as Prime Minister, is the job getting at you and isn’t loneliness and being solitary part of the hazard of the job?

    PRIME MINISTER:

    I have had some pretty extraordinary questions in the last two years, Gordon, three years, some of them actually from you, but I think that one probably takes the biscuit think the second part of it, Heaven alone knows where these nonsenses come from and I cannot speculate on that, it is not for me to suggest where everything that appears and is published comes from, if I did that no doubt I probably would feel very lonely and isolated, but I don’t, so I am not.

    As far as the first part of your question is concerned, I do not think it applies at all and I have simply no idea what led you to ask that part of the question.

    QUESTION:

    Did you discuss with Mr Hosokawa today the Yugoslavian problem and can you tell us is the war in Yugoslavia at its end and who or what is an obstacle to peace at the moment?

    PRIME MINISTER:

    The answer to the first half of the question is we did not this afternoon discuss Bosnia but it is quite probable that we will have the opportunity over dinner when we meet later on tonight to continue our discussions on a range of matters and I would imagine that Bosnia would be amongst them.

    As for the impediment to peace, it is difficult to determine precisely where it is, it seems to be a moving impediment, I do not think one can point the finger at any particular group and say they are the impediment to peace, the fact of the matter is that we want everyone to decide that they are going to reach a peaceful settlement and as this winter approaches it becomes increasingly urgent that that is the case. Last: winter the difficulties of delivering humanitarian aid were serious enough but last winter was fortunately a relatively mild winter in Bosnia, we cannot be certain that this winter will be the same, it may be a good deal more savage and that would mean that the hardship, particularly with the extra period of fighting damaging the infrastructure and communications ever more daily, would potentially be a disastrous occurrence.

    So I think there is a very great premium on every participant deciding that it is necessary to reach an agreement and reach an agreement speedily. The negotiators, David Owen from the United Kingdom amongst them working for the United Nations, are working very hard to achieve such an agreement and I hope that every wise international friend of Bosnia will put whatever pressure they can on the participants to make sure that an agreement is made and crucially kept. I think people are getting pretty cynical, month after month after month, of artificial bogus agreements being signed, promised and broken within hours of their signature. So I think we want to see some concrete action by each of the participants in this dreadful conflict.

    QUESTION:

    I apologise for coming back, Prime Minister, but the Chairman asked me whether I was satisfied with the answer and as I am not I thought I might just come back. Was it wise for the Chancellor to talk about a leadership battle going on in the party against you?

    PRIME MINISTER:

    He did not, as far as I am aware he did not and there is not and I am not aware of one and there is not one and I know it is a great disappointment to many people because it will undoubtedly be very newsworthy but the fact is there is no vacancy and neither is there going to be one.

    QUESTION (NHK):

    There exists a feeling of a great debt from World War II, there were many POWs and there is now an issue of compensation, what is your view regarding this issue? In relation to the reform of the UN Charter, do you think that this enemy clause regarding Japan should be excluded?

    PRIME MINISTER:

    Upon the latter point there was no suggestions about the exclusion of Japan, the question of reform is under discussion and Japan is clearly a prime applicant should there be extension of the Permanent Membership. As far as your earlier question about Prisoners of War, the Prime Minister reiterated his earlier comments and we are having continuing bilateral discussion to see whether we can find a conclusion to this affair, but I do not think it is helpful to comment beyond that.

    QUESTION (Reuters):

    In your discussion with the Prime Minister or with any of the business leaders did the current level of the Yen come up and its possible effects on trade?

    PRIME MINISTER:

    No we did not directly discuss that, there is a very strong Yen at the moment and we discussed exchange rates generally but we did not discuss the particular point which you ask in your question.

    QUESTION (TASS):

    You mentioned that you discussed Russian problems today, could you go into more detail?

    PRIME MINISTER:

    Only up to a point. We were looking at the reform programme in Russia, the difficulties that have been overcome and the opportunities and difficulties that lie ahead, that was the general thrust of our discussion. we both share a wish to see democracy firmly entrench itself in Russia, we understand the difficulties there have been but also the immense progress that has been made over the period of the last five years and we find that progress immensely reassuring. Nobody is in any doubt about the difficulties that lie ahead and we were just casting our mind forward to some of those.

    QUESTION (John Craig, Daily Express):

    You said today that we are on our way out of the hole, if that is right, why is it then that Conservative MPs are still sniping from the sidelines, as your Conservative Party Chairman describes it?

    PRIME MINISTER:

    I described to you what the economic circumstances undoubtedly are. We were in recession for far longer than I would have wished, for a couple of years or so, it was longer and it was a deeper recession than I wished. Self-evidently Britain is now out of recession, the CBI for example think our growth will be rather higher than the Treasury have forecast, but I think there is no doubt that we will have the highest growth in the Community this year and a higher level of growth next year and again the highest level in the Community. So I think when you ally that to the fact that our exports are booming, our productivity has risen, and I think there is no doubt when one puts that against the other economic developments that we are seeing domestically, that the British economy is recovering in precisely the way we would wish it to recover if we are to have a sustained period of growth with low inflation. It has not been easy to achieve that, it has been very painful not least for many companies and many people in the United Kingdom, but it has been achieved, what we now have to do is to use that platform to make sure we can sustain it over a very long period and that is the matter that concerns me.

    As far as sniping concerned, politics is sometimes about sniping, but it does not alter the realities and the realities are that the thing that is of greatest importance is the growth of the British economy, the return to increasing prosperity and the opportunity to put more British citizens back to work, that is what. I am concentrating on, that is what the government is concentrating on and I fervently hope that is what every Member of Parliament will concentrate on.

    QUESTION (NHK):

    Four years from now Hong Kong will be returned to China, this is a relevant question, the UK had a colony over the past 150 years, how do you view this UK colonial rule in Asia for this past 150 years? In 1902 there was an Anglo/Japanese alliance but during World War II we had a different relationship, how do you view Japan’s dominance in Asia during World War II?

    PRIME MINISTER:

    I think there are some things, I am predominantly concerned with looking at the present day position and what the opportunities are for the future. But as far as past colonial rule is concerned, a great deal of that was a long time ago, I think it offered a great deal to a large part of the world. At the moment we are moving towards the end of British responsibility for Hong Kong, that will end formally in 1997, that does not mean we will not continue to have a very strong and powerful affection for Hong Kong, we most certainly will, it does not mean we will not have a continuing interest in Hong Kong, we certainly will, it does not mean we will not continue to have a great deal of trade relationships with Hong Kong and investment in Hong Kong, we most certainly will do all of those things, and what we are concerned to do is to make sure that Hong Kong is able to continue as a free and open entrepôt in the future, just as it has done in the past, and I think in our negotiations with China we will be able to achieve that outcome.

    QUESTION:

    Concerning the privacy law in terms of press coverage in your country we have heard a lot about the possibility and need for protection of privacy being discussed in your country, about self-regulating bodies being established, what does the government think about this, are you thinking about some legal approach to this matter or are you going to leave it in the hands of the self-regulatory bodies? In this regard it seems like the White Paper is delayed in being produced, could you explain the situation?

    PRIME MINISTER:

    I think you have heard the evidence of your own ears that our friends, the British press, are not repressed, they look like a pretty free and open press to me and I have absolutely no doubt that they will be as irrepressible in the future as they have been in the past. We do have a report that was commissioned on the subject of that matter and we are examining that report and will make our announcement soon, but I think we had better finish our examination and I do not think it would be prudent to make any announcement of that sort in Tokyo, I think that is an announcement that will be best made when conclusions are reached in London.

    CHAIRMAN:

    We would like to end this Q and A session, can we have any message to the Japanese people regarding your visit here to Japan, can we have the last remarks from you, Prime Minister?

    PRIME MINISTER:

    I would simply wish to say this in conclusion. The relationship between Japan and the United Kingdom has grown and widened and deepened very significantly over the last decade or so, one notices that most obviously in the trading and economic relations, I think one increasingly sees it in international cooperation as Asia becomes self-evidently more authoritative in the world at large, So I regard our relationship with Japan as extremely important and I am delighted to have had the opportunity of returning to Japan for the second time in just a few weeks.

    There are as you may know, or perhaps you may not know, there are many tens of thousands of Japanese students in the United. Kingdom and there are quite a few British students in Japan and I think that shows the extent to which as the generations move on the relationship between our two countries becomes ever closer and think that is a very welcome development and I welcome the opportunity to express it.

    CHAIRMAN:

    Thank you very much, Mr Prime Minister. In a very tight schedule you joined us and we appreciated very much your joining us at this National Press Club. From the Japan National Press Club, as is customary, I would like to present you with a small memento of this occasion. This is a pen done with Japanese craftwork.

    PRIME MINISTER:

    Thank you very much, I think this is the way to conduct a press conference and I think you have probably set a precedent that I am sure my colleagues from the United Kingdom will wish to follow on every future occasion.

  • 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.

  • Mr Major’s Briefing en route to Tokyo – 18 September 1993

    Below is the text of Mr Major’s on the record briefing on the plane to Tokyo on Saturday 18th September 1993.

    MICHAEL PERRY (UNILEVER):

    We have a good team of businessmen in this group as you have seen and that in itself is unaccidental; what it describes most fundamentally is the value we place on a visit of this nature in the company of the Prime Minister at this sort of time. This is a time of enormous change in Japan, as you will be aware, a new government, new thinking, massive economic problems, new kinds of problems for them, a determination to drive through improvements and changes in their own balance of trade and payment patterns, recognition of the serious problems they have got in dealing with their trading partners and Britain over the last five or six years has been seeking to achieve progress in this area through rather different means from our American friends; we sought to persuade them about our role as their best friends in Europe in terms of inward investment and looking to build partnerships within Japan.

    What has happened is that most of the formal barriers of trade have now disappeared; there are one or two issues still around but they are really quite minor; they are matters such as whisky, leather, shoes. What is much more important is the Japanese propensity to buy foreign. This is cultural, it is historical, they are not used to the idea of putting their business in the hands of foreign companies. This is much more down to us to solve than down to governments to solve. Governments can pave the way but we have got to do it. There is a massive problem of convincing Japanese buyers that they can rely on the quality, supply and all the other issues that they think are important in a foreign company so that is a new area of focus and it is very much what the export promotion programme for the DTI by the British Overseas Trade Board has been about. This visit ought to give new impetus to that coming as it does right behind the new Hosokawa package which focuses very much on getting the Japanese consumer to have some of the benefits of the high yen. They are not doing it at the moment; margins are still high, the cost of imported products is absurdly high and there are still plenty of restrictive practices around in the retail and wholesale trade and it is nice, I think, to see the growth of some of the discounters who are now emerging in Japan who are sticking a knife into the soft underbelly of a rather fat distribution system and they are getting a lot of encouragement which is important.

    PRIME MINISTER:

    Let me just add a word or two from my perspective:

    This is overwhelmingly though not exclusively a trade-related trip. The trade relationship we have with Japan has grown very dramatically; all of you will be familiar with the inward investment we have seen in the North-East, in Wales and elsewhere but I think the time has come when we need to give that trading relationship a fresh emphasis and a fresh push and there are a variety of reasons why now is a good time to do that: the new Hosokawa Government is one, I will be the first overseas visitor, I think, that he has received; the fact that the Japanese are becoming increasingly concerned about the scale of their trade surplus, as others are, renders it another ideal opportunity for us to push the case for British exports and for British investment.

    There are a number of particular matters that clearly one will raise when we are there. I shall raise the GATT Round and the importance of making sure we get a satisfactory settlement there; there are still some Japanese problems on GATT that need to be solved. There are a series of other matters that you would he extremely surprised if I didn’t raise; I need not run through a long list of them but whisky springs immediately to mind. On the last visit I had to Tokyo eight or nine weeks ago, the external tariffs on whisky disappeared but there still is a very discriminatory internal tariff on whisky – you can argue whether it is three times as high or ten times as high but there is no doubt that on whisky in particular and spirits there is a very high discriminatory internal tariff and that is the sort of matter I will be discussing with them.

    We certainly want to see what we can do to close the very substantial trade gap; it is something like £5 billion. I think there is ample scope for us to see that close.

    We have on this trip as high-powered a delegation of senior British businessmen as I think can ever have left the United Kingdom together; they will not be novitiates in Japan; many of them will have had a relationship for a long time and they will be there to develop longer-term themes. Whereas in India we were looking at the prospects of a series of contracts that we might or might not have got in the very short-term – as it happened on the Indian trip we did get them – here we are looking at a longer-term perspective rather than short-term contracts so on the business front that is the sort of thing we will be discussing.

    There will be a meeting with the Kaidonran [phonetic] for the businessmen and I, and I hope that will be a successful meeting. I have a fairly lengthy meeting with the Prime Minister and all the businessmen will join me afterwards and we hope this will play some part in opening a few doors and speeding up some decisions.

    On other matters, there are some bilateral matters and there will be some political matters we wish to discuss. We will certainly discuss the question of the prisoners of war issue but I don’t propose to go into details of that at this moment but there are a range of bilateral issues like that.

     

    QUESTIONS AND ANSWERS

    QUESTION (Gordon Grieg, Daily Mail):

    Do you think that the controversy in the Conservative Party about your leadership tends to undermine the importance of a trip like this?

    PRIME MINISTER:

    No, I don’t and I very much doubt that Mr. Hosokawa and I will give it a passing thought.

    QUESTION (Gordon Grieg, Daily Mail):

    But the Japanese press might!

    PRIME MINISTER:

    I can’t answer for the press.

    QUESTION (Gordon Grieg, Daily Mail):

    So you don’t think it is a diversion at all?

    PRIME MINISTER:

    I am here to discuss trade and that is what I will be doing.

    QUESTION:

    Are you a little worried that this is perhaps a slightly inconvenient time for you to be abroad for so long? Some of your colleagues at Westminster are a little worried that you are going to be out of the country for a week and things are looking a bit dodgy.

    PRIME MINISTER:

    I am glad you confirm they need me so much!

    QUESTION (Mark Webster, ITN):

    Do you personally favour the idea of some form of compensation for the POWs? Although I appreciate you can’t discuss it publicly, do you personally feel that some form of compensation would be appropriate?

    PRIME MINISTER:

    I am going to discuss the matter in a way I think is most appropriate and that is to express views directly to the Prime Minister.

    QUESTION:

    Mr. Perry, British trade delegations have been coming to Japan for about the last thirty years and it has made no appreciable impact on the balance of trade. They seem to have a great tradition of buying Japanese. What makes you think you are going to change anything?

    1. PERRY:

    Of course that is right but there has been a great deal of movement. When I started doing this sort of thing about ten years ago we were talking all the time about trade disputes, about massive problems of access, built-on tariff barriers, non-tariff barriers, quotas, every kind of impediment. They have in the course of a decade been quite literally swept away.

    What has happened is that our exports to Japan have gone up in a three-to–four-year period by 18%, the first half of this year up another 13%. I think we have got to build on positions of that kind.

    The point you are making is a very fair one. We will not succeed by browbeating either Japanese officials or Japanese customers. If you are a customer, you are not going to succumb to being browbeaten by a supplier; you are going to be persuaded by a supplier eventually on a set of criteria that you will set, nobody else.

    QUESTION:

    But isn’t that the Japanese method, browbeating?

    1. PERRY:

    I don’t think so. I have been doing trade there for a long time. I have encountered no real barriers to selling superior products.

    PRIME MINISTER:

    Can I just add one word to that last point? I forget which of the businessmen said it to me last night but I think it is germane and I suspect Michael will strongly agree with it. It is quite difficult to get into the Japanese market in the first place; it takes a long time; you don’t just make one visit and they sign up huge contracts but as he put it to me, the more you get into the Japanese market the easier it is to do further business and there is a very dramatic growth in the business. It is very much a long-run game and I think this is part of accelerating that. I hope it will help to show how strongly the Government is behind the British export effort and the British investment effort hut it isn’t something that one expects suddenly to happen overnight and dramatically but the growth in exports over the last few years has been pretty astonishing. Michael quoted a three-year figure; I think it is just over 14% in the last fifteen months or so it is on an escalating trend and I hope we can give it another push because they are keen to import, I am keen to encourage them to provide import incentives and to remove any cultural discrimination that there may be – in the case of things like whisky, taxation discrimination.

    QUESTION:

    On GATT, although there are problems with the Japanese, is there anything of a magnitude that could derail the whole Uruguay Round as compared with the problems between America and the EC which clearly could?

    PRIME MINISTER:

    I think it is most unlikely. There are a series of problems with Japan, rice is the most obvious one but there are others as well but I would be astounded if it were a Japanese problem that brought the GATT Round to an unsuccessful conclusion, absolutely astounded. I think at the moment the Japanese are waiting to see what happens in the disputes over Blair House and on agriculture and on one or two other high-tariff problems between the United States and Europe but once that is out of the way, although there are some quite painful decisions – rice is the most painful – I don’t have any doubt at all that the Japanese would reach a conclusion and that they would not block a GATT Round.

    QUESTION:

    I just wanted to go back to the question of your leadership, Prime Minister. You were quoted recently as saying that you would leave your job when we least expected it and some of your critics inside the party have been suggesting that that could be quite soon. Can you give us a pledge that you will not be leaving quite soon, that you will be staying on until the next election?

    PRIME MINISTER:

    I think you misread what was said but I think you can expect to be having conversations like this with me for quite a long time ahead. I look forward to them very much.

  • Mr Major’s Joint Press Conference with French Leaders – 26 July 1993

    Below is the text of Mr Major’s joint press conference with President Mitterrand and Prime Minister Balladur, made in London on Monday 26th July 1993.

    PRIME MINISTER:

    We have had this morning a series of discussions. I have had the opportunity this morning of discussions with President Mitterrand and the Prime Minister. During the time we have held those discussions eight of our Ministerial colleagues have been discussing their own particular areas of responsibility. At the conclusion of their discussions the whole team came together for a plenary meeting and then had the opportunity of discussing matters again over lunch.

    When I became Prime Minister some time ago one of the particular objectives I had was to develop relationships between Britain and France. It seemed to me that our countries had a substantial pool of common interests, there was a great deal of scope for cooperation waiting to be tapped. I think what today’s summit shows, with a much larger participation I think than we have ever had before amongst other Ministers, is that we have travelled a very long way down that road of cooperation.

    Today’s summit follows months of intensive work, Prime Minister Balladur’s visit to London in early May, my own visit to Paris at the invitation of President Mitterrand later on that month.

    Let me set out in very brief terms prior to your questions some of the results of those discussions.

    May I turn first to foreign policy. I think it is undeniable that we are working more closely today on international problems than ever before. We have discussed Bosnia at different meetings today, we have agreed that the key points that support the efforts of Dr Owen, and Mr Sholtenberg to reconvene the negotiations in Geneva this week. We clearly are concerned to help Sarajevo, to support UNPROFOR’ s efforts to create a ceasefire, to restore water, to restore power and to secure access for the relief convoys. We also want to sustain the humanitarian relief efforts as long as conditions permit and to accelerate the implementation of the safe areas resolution, including the provision of air support.

    We discussed a number of matters relating to the European Community, including of course the joint Franco-British exercise on subsidiarity. France and Britain have now agreed a list of 24 items of Community legislation, many of them substantial, that need to be repealed, withdrawn or amended. Examples of that include tax directives on stock exchange transactions, directives on drinking water and pollution which in our judgment are much too detailed and much too prescriptive. Both our countries will also be collaborating with Germany which has drawn up a list of substantial items of its own. The aim of this work is to present the results of it, jointly, to the European Commission in the autumn as part of the preparation for the December European Council decisions.

    We have had some discussions this morning also on joint defence interests. We set up last autumn the Franco/British Joint Commission on Nuclear Policy and Doctrine, the objective is to coordinate our approach to deterrence, to nuclear doctrines and concepts, anti-missile defences, arms controls and non-proliferation. We have decided today to make this Joint Commission a permanent standing body with a substantial amount of work to continue into the future.

    We have looked also at joint defence projects, we reviewed collaboration in defence projects, Britain and France at the moment are working together on 21 separate projects, some of them also involving other countries as well. We have more British projects with France than with any other single international partner.

    We discussed also briefly the Channel Tunnel and I am pleased to announce that Her Majesty The Queen and President Mitterrand will jointly open the Channel Tunnel on 6 May 1994.

    We discussed also science and technology, we have decided to reconvene a Franco/British conference to explore fresh approaches to science policy. I think it will be a wide ranging conference, it will look at questions such as technology transfer, how to ensure that research leads to better product development and far better public explanation of scientific questions.

    We also looked at the question of D-Day and its 50th anniversary. Next year is a very remarkable part of our joint history with the 50th anniversary of the D-Day landings. Britain and France are planning to commemorate this historic event in an appropriate way, there will be very substantial celebrations to commemorate that and Ministers have been appointed in both countries to supervise the preparations. Those Ministers will be meeting shortly in order that we can bring those preparations to fruition. I expect we will be able to announce details of the commemorative events in the autumn.

    We have covered a range of other issues but rather than running through them in great detail I will try and pick up any points of interest to you in the question period we will have shortly.

    PRESIDENT MITTERRAND:

    I will not add anything really to the list of issues that have been discussed, what you have heard is a very complete list and this gives you an idea of the subjects we have talked about. It will be for you to ask the questions you want to ask.

    So I think it is more a question of the general spirit and atmosphere that I would like to talk about. We have had great pleasure in coming here to London and meeting our British partners and exchanging with them our positions and thinking and arguments on the problems on which we have diverging opinions and also we have been able to note that there were more and more points on which our views were the same.

    In the field of foreign policy where our two countries have very long standing experience going back many many years, in Europe in particular, well there it was easy for us to reach common conclusions. On the new problems that are coming up, new in relation to this generation, in relation to history, in other words the setting up of the European Community and its consequences, its impact, its effects, and the development of world trade, on those matters we still have to define more closely our actual positions but we are delighted with the efforts that have been made successfully by the British government in order to enable the development of the Maastricht agreement. Of course each country will operate according to its own style and on the basis of the text which is the basis of the European Agreement.

    What has just been said about the commemoration of the 50th anniversary of D-Day, well we all know what we owe to the United Kingdom and on the French side we will do all that should be done in order that people representing political and military spheres should meet with the warmest and the most grateful welcome possible. It is an important date, it was an important date in the relationship, as you know, which have become now very friendly relations, which became very friendly relations between our two countries at the beginning of the century.

    M. BALLADUR:

    At this stage I have got nothing further to add to that, thank you.

    QUESTION (La Tribune):

    Did you talk about the EMS this morning and has Mr Major any views on the chances of its survival and has Britain any particular interest in the EMS? On the French side, can we be told if the chances of escaping shall we say the British model with a more competitive currency at a lower rate of interest with more creation of jobs, is that likely to happen, or are the markets going to impose the same thing on France as it imposed on Great Britain last year?

    PRIME MINISTER:

    We certainly spent some time discussing this matter this morning and I think the statement issued this morning by France and Germany, the Franco-German statement, reaffirms support for the existing parity and close cooperation within the European Monetary System. I do not think it is in anyone’s interest to have continuing currency turbulence in Europe, it damages the prospect for economic recovery in everyone’s export markets so I hope the possible turbulence will settle down, but I have nothing further to say than that.

    M. BALLADUR:

    I would like to add something on that. Firstly, you asked the question in a way to elicit a certain response, I have never heard of a more competitive currency, a reference to that, what is important is that economies be competitive with one another. In France we have achieved good results on that, we are very much attached to monetary stability, we do everything we can to try and ensure it, and I note that the Prime Minister has just said that the English too want this monetary stability maintained in Europe and that they do not consider that there would be any advantage in greater instability.

    QUESTION (….Liberation):

    What did you discuss on GATT? How did both sides look to the future in the negotiating process on trade agreements?

    PRIME MINISTER:

    We had some discussions on the Uruguay Round this morning and our Agriculture and Trade Ministers also spent some time discussing it; it is clearly a matter of immense importance. All of us are agreed on the importance of the GATT Round and of a successful outcome on agriculture. We know that France has some particular difficulties with the Blair House Accord and it must be examined in more detail by the Community, hence the request for a Joint Council in September and I think in particular the constraints which Blair House would impose on internal management of the CAP, on growth in EC exports, erosion of Community preference, those are problems that France have raised and that the Community will have to discuss.

    We all agreed that a durable and balanced agreement is necessary. I know in the discussion between Agriculture Ministers that Gillian Shepherd emphasised that in our view the Blair House Accord was a good one for the Community but these are matters we need to discuss. What is a matter of agreement between us is the overall desirability of a satisfactory and balanced GATT agreement.

    PRESIDENT MITTERRAND:

    We come back to an idea which already has been expressed at least a hundred times but I think should be reiterated with strength and that is that the GATT negotiations – world trade negotiations – are not only on agriculture. I think that one of the mistakes made by people who started the discussions – I have in mind particularly our American friends – way back in 1985 was that they were totally obsessed with agriculture and that gave the impression that people wanted to get agreements which would be good agreements where it was possible for that particular country to find that beneficial leaving out areas where one might not be able to reach such favourable agreements for oneself. This was Mr. Reagan’s sign of the times – the way we interpreted it anyway. That is why France is talking about a global comprehensive agreement.

    To come back to agriculture itself, the important thing is that the agreement should be a balanced agreement. You can’t have an agreement which is one-sided. If there is a compromise solution found, it must be beneficial to all the parties concerned.

    Concerning Blair House, this is a point of friction naturally because we think that the agreement needs to be revised because it happened under conditions which we think questionable. In any case, the only thing that really counts is the political decision, the actual political decision taken by the countries concerned; that carries much more weight than the purely technical discussions that take place beforehand.

    That is why we are quite prepared to say and repeat that an overall balanced and lasting agreement would be a good thing for international trade but it would be a bad thing if it turned out that those agreements were based on a grave injustice that we just don’t want which I think people can easily understand.

    QUESTION:

    Can I just add a further question? Can one say that there has been progress today on GATT?

    PRESIDENT MITTERRAND:

    It seems to me that there has been progress on two areas, firstly I feel that we better understand one another – at least I for my part better understand the British position and secondly I think we agree and consider that a meeting of Foreign and Agricultural Ministers should be held in September which will be very important and it will be there that we will be able to discuss agriculture and the general organisation of world trade so we must prepare very actively for that meeting in September. Our British friends have agreed that that would be an important date.

    QUESTION (Adam Boulton, Sky News):

    I wonder, in view of the reported comments in the Sunday papers this weekend, if Mr. Major could tell us how much longer he thinks he is going to be able to cohabit with some of his Cabinet and what advice the President and M. Balladur would give on cohabitation with ideological opposites. [Laughter].

    PRIME MINISTER:

    It seems to work very well.

    QUESTION (David Langton, Bureau of National Affairs):

    Of course, no illegitimate questions from me at all!

    On GATT, last week we had the Director-General, Peter Sutherland, hoping to knock out a conclusion by the end of this year. Have you got any good or bad news for him?

    Secondly, the French Foreign Minister, Alan Gerait [phoentic], was calling for trade policy instruments to be strengthened. Did you discuss the strengthening of trade policy instruments today, particularly in relation to, say, US anti-steel dumping provisions?

    PRESIDENT MITTERRAND:

    Yes, we did. Mr. Major asked me questions about that and I gave him a certain amount of detail about what we would wish. The problems, as I said, will be dealt with in the documents that we will send to Brussels in the forthcoming weeks.

    PRIME MINISTER:

    We have to find a solution to anti-dumping and countervailing actions – there is no doubt whatever about that. I expressed the view this morning that the long-term solution to problems of international trade in steel lies in the conclusion of a multilateral steel agreement and we will continue to stay in touch to discuss that particular matter.

    QUESTION (Tony Bevins, The Independent):

    Have you apologised to the bastards, Mr. Major?

    PRIME MINISTER:

    We have been discussing Anglo-French matters this morning, Tony, Anglo-French discussions.

    QUESTION (Keith Rockwell, Journal of Commerce):

    Mr. Balladur and Mr. Major, was there any discussion of the EC’s policy with regard to the import of Japanese cars and was there any discussion at all of Britain’s role in all of that, whether British-made Japanese cars might be subject to any further restrictions?

    PRIME MINISTER:

    No, that wasn’t discussed in our discussions this morning and don’t believe it was raised when the Trade Ministers met.

    QUESTION (Carol Walker, BBC TV News):

    Given the attack on the French base in Sarajevo, was there any further discussion about the possible use of air strikes?

    PRESIDENT MITTERRAND:

    It is a subject that we started to deal with several weeks ago when the so-called “safe areas” were decided upon within the UN and the point being made that respect for such safe areas is for mainly Muslim citizens in Bosnia and that the protection of such zones could require means that would be used in order to protect the populations if they were threatened and this is what is happening right now in Sarejevo in particular.

    QUESTION:

    I would like first of all to ask you about the latest escalation in the Lebanon and the latest Israeli aggression of the sovereign state of Lebanon. How do you see the effect of this on the peace process in the region?

    My second question is addressed to the French President, M. President, changes in immigration in France have created an atmosphere of uncertainty among the immigrants in France and in particular among Arab immigrants and North African immigrants. Are you aware of this new atmosphere in the immigrant community and do you envisage any change that would take account of this situation which is unstable?

    PRIME MINISTER:

    On the first point, we did not discuss Lebanon this morning. On the second point, I will let the President respond directly.

    PRESIDENT MITTERRAND:

    I would have preferred to have answered the first question as a matter of fact but when people fight each other on both sides of a frontier you can’t expect the sovereignty of each country to be fully respected and once that situation obtains then it is very natural that both sides have to accept the consequences of such a conflict and that conflict will necessarily make the peace process more complicated. There is an inherent contradiction in all this which is pretty obvious.

    On the immigration legislation, you are talking about French political affairs there and I have not come here to London to talk about internal French political matters – that is rather the same as Mr. Major’s answer a moment ago when there was some mention of the necessity of talking about our Franco-British meeting and avoiding a sort of British-British discussion or a discussion internal to Britain as we say Franco-French on our side. You say the same thing? Anyway, I don’t think that the immigrants in France when they are in a completely lawful situation that is accepted, when they have been legally admitted to France following a certain number of procedures which on labour matters come under the Ministry of Labour and it can be the Ministry of the Interior when it is a question of permits and so on so foreigners who are living in normal conditions, when they are legally present on French soil, must be treated normally.

    If they are not present legally on French soil – if they are illegal immigrants – then they can hardly expect to be treated exactly in the same way so it is their natural fate to be taken back home sooner or later. Now there the discussion does start of course within France and with other countries to see what safeguards and guarantees should be granted to these men and women because they deserve respect even if they have gone against the law and we have to see with other countries too what should be done in order to respect their own individual human rights but this is an internal French affair quite honestly and there is no point in having a discussion among ourselves here in Great Britain.

    QUESTION (France Two):

    Mr. Prime Minister, have you discussed the future of the EBRD and is Britain going to support a French candidate to support M. Atteli [phoentic]?

    M. BALLADUR:

    The future of the EBRD for the moment is a matter of choosing a president for the institution. As you know, France has an excellent candidate and for the rest you must ask Mr. Major what his views are.

    PRESIDENT MITTERRAND:

    If Mr. Major allows, I will recall some memories perhaps which are more personal memories for me than for him because at the time when the various seats and headquarters and offices were negotiated among a number of international bodies, including EBRD, it had been understood that if the headquarters were to be in London then at least the first presidency and the first term of office would be a French presidency. If it isn’t the same president nevertheless I think it would be right and only natural that it should be the same country and this would be accordance with the original agreements.

    PRIME MINISTER:

    [Inaudible] excellent candidates. The Community are seeking a unified candidate. We have expressed our view to the President of the Community and I hope will reach a conclusion shortly.

    QUESTION (George Jones, Daily Telegraph):

    Could I ask the Prime Minister and the President, given what looks like the imminent collapse of the Exchange Rate Mechanism and all the turmoil there has been in France over Maastricht and in the British Parliament, whether they think the treaty is still relevant or should probably be torn up and the Community should start again on a more realistic and perhaps lowered-expectation treaty for European union?

    PRIME MINISTER:

    I don’t think the treaty should be torn up. The British Parliament has passed the treaty, it is now an Act, it has got Royal Assent subject to one outstanding court case which I hope will be swiftly cleared away and it will come into effect and I welcome that fact self-evidently since we have just taken it through Parliament. I think there is much in this treaty that is good for Europe and good for the United Kingdom and I believe it was right to take it through the House of Commons.

    PRESIDENT MITTERRAND:

    On my side, of course, I submitted the Maastricht Treaty to a referendum in France, in other words it is the French people that voted and who chose finally what to do and there was a political battle which was a pretty difficult one where some important and very often excellent arguments were expressed on both sides. This was a national debate of considerable magnitude but the rule of democracy was applied and France adopted the Maastricht Treaty by popular vote and now the Maastricht Treaty is our rule. I was in favour of it, as you know and therefore I was delighted that this was the decision taken and the decision that was taken I would not say was more important than a vote by Parliament because I am very much in favour of representative democracy – France is a representative democracy. Because under our legislation a referendum was perfectly possible, it was a very important way of getting this really firmly established in our history and this has been done and is behind us and the government also very much hopes that the agreement will be successful.

    Your somewhat hasty definition, if I may say so, of the fact that now the time had come to tear up the treaty and that the EMS is completely excluded I think is subject to examination. We are precisely working through this and it is difficult but France’s determination is unquestionable and we think that the future of Europe is important. We have different conceptions very often on this but we certainly will coordinate our efforts to the same goal and in my view at any rate it would be very harmful and very sad if the remarkable progress made among the Twelve should be into question whereas the prospect before us is that in a few years now we will have a single currency.

  • Mr Major’s Commons Statement on the 1993 Tokyo Economic Summit – 12 July 1993

    Below is the text of Mr Major’s statement made in the House of Commons on 12th July 1993 on the Tokyo Economic Summit.

    PRIME MINISTER:

    The Prime Minister (Mr John Major): Madam Speaker, with permission, I should like to make a statement on the economic summit in Tokyo and the Group of Seven meeting with President Yeltsin. I attended the summit with my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer. During the three days I also had bilateral meetings with our host, Prime Minister Miyazawa, and with the Presidents of the United States and Russia and the Prime Minister of Canada. The summit produced significant achievements. These are set out in the economic and political declarations which I have placed in the Library of the House.

    Before the Tokyo summit, the GATT talks had been stalled for several months. The summit acted as a catalyst. The United States, Japan and the European Community negotiated a report on access to each others’ markets which has led to a resumption of GATT negotiations in Geneva this morning.

    The report offers large benefits to British industry. In six of the eight categories where tariffs are to be abolished entirely, Britain is a net exporter. These include pharmaceuticals and construction equipment. Japan’s agreement to abolish all the import duty on whisky will give a welcome boost to sales in a market which is already worth over £170 million a year to Scotland. Many other particularly high tariffs faced by British exporters will be cut by 50 per cent. or more. These include punitive United States tariffs on ceramics, glassware and high quality textiles. In other categories of manufactured goods, there was agreement to cut as many tariffs as possible by a third, or to harmonise them at low levels.

    The Uruguay round is far wider in scope than previous multilateral trade negotiations. It still has a long way to go, but the Tokyo meetings have injected much-needed momentum and real progress on substantive issues– action as well as words–and the world-wide prospect of more trade and more jobs, especially for a trading nation like the British. With low interest rates and firm control of costs, British industry is exceptionally well placed to benefit from a successful GATT round.

    Each summit country, except Japan, is facing a serious fiscal problem. With the exception of the United Kingdom, the European participants are not expecting economic growth this year. Against this background, the summit identified barriers to growth which have developed in much of the industrialised world.

    As at the European Community’s Copenhagen Council, I found a new willingness among our partners to address some of the hard lessons that we learnt in the United Kingdom during the recent recession. Three points in particular were generally accepted. The first is that there is a long-term upward structural trend in unemployment in addition to the cyclical effect of the recession. Secondly, on present forecasts, the cost of social provisions is likely to exceed the capacity to meet them in all the main industrial economies and, thirdly, that deregulation and labour market flexibility are vital to get unemployment down.

    It was agreed that Europe should implement the firm budgetary and other measures needed to facilitate the rapid reductions in interest rates that are now required in many countries on the continent. In north America, strong action was being taken to bring down fiscal deficits over the medium term with the objective of securing higher saving and investment. Japan, meanwhile, will implement fiscal and monetary measures to ensure sustained growth led by strong domestic demand. That will help to reduce Japan’s large current account surplus. Each of those measures is intended to help growth around the world. The summit’s accent on jobs was reflected in agreement to send high-level representatives to a special meeting that President Clinton is convening in the autumn. That will study the causes of unemployment and pool experience in seeking solutions.

    In April, the Group of Seven put together an unprecedented set of measures to help Russia through its deep transformation. At Tokyo, the Heads of Government confirmed that approach and noted that some large financial flows were already being made available, including $1 billion in a new IMF facility. We set out a programme worth some $3 billion to help privatisation and restructuring. There are now some encouraging signs of a spreading enterprise culture in Russia. The summit leaders told President Yeltsin that they were determined to sustain the huge support that they had given reform in his country. Of equal importance, we have reinforced our political partnership with Russia. As an innovation this year, our agenda included a joint review with President Yeltsin of international problems. At my suggestion, the meeting concluded with an invitation to the Russian President to join us again next year in Italy.

    The political declaration touches on many of the problems we discussed with President Yeltsin, or beforehand among the Seven. We supported a negotiated settlement for Bosnia, but only on the basis that it would be acceptable to the Muslim people and not imposed on them. We highlighted the importance of the non-proliferation treaty, supported the constitutional talks in South Africa and expressed concern about the behaviour of Iraq, Iran and Libya.

    The summit paid close attention to problems of the developing world and of the environment. I secured agreement that improved debt reduction terms should be considered for the poorest and most indebted countries. I hope that that will carry implementation of the Trinidad terms further. On the environment, the summit reaffirmed its commitment to sustainable development and implementation of the Rio decisions.

    Finally, a word about the summit process itself. Over 19 meetings, the summits have evolved from an informal discussion between Heads of Government into an enormously expensive and, in my view, over-structured international event. I believe that radical change is necessary if we are to get the best out of the summit process. I proposed innovations last year and I made further proposals in Tokyo. These were widely supported. I hope that, as a result, future summits will be more informal, less pre-prepared and will provide even more opportunities for spontaneous discussion between the summit Heads. Despite the procedural weaknesses I have mentioned, the Tokyo summit produced results of particular benefit to the United Kingdom as an exporting nation and a leading advocate of free trade. It concentrated on problems that are causing deep concern not just in this country, but around the world. It helped to bring leaders who are addressing those problems in common closer together. It laid the groundwork, I believe, for productive work at future summits.

    Mr. John Smith (Monklands, East): I thank the Prime Minister for making this report to the House.

    We welcome the recognition by the Group of Seven that there is insufficient growth and too much unemployment in their economies. In particular, we welcome President Clinton’s proposal for a special employment summit this autumn.

    Can the right hon. Gentleman explain why, when similar issues were raised at the summit last year by the then French Government, he was, as was noted in Saturday’s issue of The Independent, brusquely dismissive of the idea of unemployment being discussed, apparently saying:

    “What for, if we can’t do anything about it?”

    Does the right hon. Gentleman now accept the need for closely co-ordinated international action to promote growth and employment, and that such action must be taken at the European level? Would not it be a good lead to others for Britain now to cut interest rates? Would not that also be very much in Britain’s interests, given last week’s warnings by Midland Montagu, among others, that recovery in our economy will flag unless there is a further cut in base rates? I welcome what the Prime Minister said about the progress that has been made on the GATT. Will he explain, however, why two of the critical issues–agriculture and trade and services–were ignored at the summit? Although valuable progress has been made in the quad talks to which he referred, all the agreements depend on a successful outcome on the difficult fronts. Why was agriculture ignored when the main protagonists in the dispute–France, the United States and Japan–were all around the same table?

    Does not the Prime Minister recall that the G7 countries have promised to settle the issue in every summit since Houston four years ago, and that two years ago, at the London summit, the right hon. Gentleman himself pledged to remain personally involved in the process,

    “ready to intervene if differences can only be resolved at the highest level”?

    Why was the subject dodged at Tokyo?

    Opposition Members also welcome the continued economic assistance for Russia ; but is it not strange that the $4 billion package agreed by the G7 in April has now shrunk to $3 billion? Why has that happened, and what message is meant to be conveyed by such a startling reduction in such a short time? Was any consideration given to assistance for the Ukraine, especially in the light of its genuine economic difficulties and the vital importance of its accepting the arms reductions agreed under the strategic arms reduction treaties?

    Does the Prime Minister appreciate that there will be disappointment–in many parts of the House, I hope–that full agreement on the Trinidad terms of official debt reduction has still to be reached by all the G7 countries, and in particular by Japan? Should not consideration now be given to extending the principle of debt relief from bilateral to multilateral official loans, especially those of the International Monetary Fund and the World bank? Can that be put firmly on the G7 agenda?

    We welcome the recognition in the declaration of the danger of nuclear proliferation and the vital importance of the non-proliferation treaty. Would not the process be assisted, however, if a comprehensive test ban treaty could be agreed? Will the Prime Minister join me in strongly welcoming the United States’ decision to extend its own ban on tests by a further year?

    Does the Prime Minister understand the depth of feeling, in this country and throughout the world, about the disastrous turn of events in the former Yugoslavia–which, I believe, merited only one sentence in his statement? Does he appreciate the incomprehension at the complete failure of the international community to address its responsibilities in Bosnia? As we speak, the Serbian siege threatens to overwhelm Sarajevo. How does the Prime Minister think the inhabitants of that city feel about the evasive platitudes of the G7 declaration? Have they not heard it all before? Meanwhile, Serb and Croat aggression continues unchecked.

    Are we not in a parlous state when the whole United Nations effort–both humanitarian relief and peacekeeping–is stalling because of inadequate resources and support from the international community? Instead of vague threats such as

    “Stronger measures are not excluded”–

    which the Foreign Secretary got into such a mess trying to explain–should we not hear a commitment to action, such as the use of air strikes, to make the aggressors understand that the international community will no longer tolerate the defiance of United Nations authority and the dismembering of Bosnia?

    Why are not sanctions against Serbia being toughened, and why are not sanctions being imposed on Croatia? Why are extra troops and greater resources denied to the United Nations in the field? Why is there no resolve to make safe areas the haven that they should be for the innocent sufferers in this bloody conflict?

    Has not the summit generally failed to fulfil its exaggerated promises of success, and, in the case of Bosnia, completely avoided its fundamental responsibilities?

    The Prime Minister : The right hon. and learned Gentleman was uncharacteristically negative, but I shall endeavour to deal with the points that he made. I am grateful for the welcome that he gave to parts of the agreement that have been reached. Whatever cross-party support is available is always helpful on these occasions internationally.

    The right hon. and learned Gentleman referred to the report in The Independent. As is so often the case with newspaper reports, I am a little baffled by what the right hon. and learned Gentleman was quoting from, or what he might mean by it. [Interruption.] Well, he probably quoted something that was inaccurately reported. As for the right hon. and learned Gentleman’s question regarding co-ordinated action on unemployment at the European level, I refer him to the report that I gave on the Copenhagen summit some time ago, to which I believe he responded.

    I agree with the right hon. and learned Gentleman that there is a long way to go on the Uruguay round. I specifically made that point. It was necessary to get the access agreement settled so that we could return to everybody negotiating, yet again, for both services and agriculture, where there are extremely difficult problems to be solved. What is vital is that, as a result of the agreement reached in Tokyo, the multilateral negotiations have started again this morning.

    Whatever agreements may be reached by the quad, they are only a part of all the countries which finally have to reach agreement in terms of the Uruguay round. I have made the point on many occasions that each G7 summit since Houston has sought an agreement on the Uruguay round. It was for that reason that on a number of occasions in the last six months I approached other Heads of Government to try to push the negotiations along further, including a meeting that I had with the President of the Commission in the autumn of last year. I have therefore, as I said I would, remained personally involved in this matter, and I propose to do so for one reason above all others. I believe that there is nothing more important internationally at the moment than a satisfactory outcome to the Uruguay discussions, for such an outcome will increase growth and create jobs in this country and around the world. I believe that that is vital. I know that the right hon. and learned Gentleman shares that view.

    On the right hon. and learned Gentleman’s questions about Russia, the $4 billion to which he referred that had been spoken of in April was an aim suggested by one member. It was not an agreement. We have agreed on $3 billion. No one is forthcoming with resources beyond that. When I met President Yeltsin at breakfast, and subsequently, he seemed to regard that as a very substantial contribution, and one for which he was extremely grateful. He did not have the reservations expressed by the right hon. and learned Gentleman about it. As for the Ukraine, we are helping the Ukraine bilaterally. The reason for the inability to help the Ukraine multilaterally is that it has not reached an IMF agreement. If it is able to reach an IMF agreement, the prospect of further multilateral assistance is certainly necessary. The point made about arms reduction in the Ukraine is important. It was a point that we discussed, and it was discussed on previous occasions. It is a problem of immense complexity that we shall need to continue to address.

    As for the Trinidad terms, Japan has always had a rooted objection to writing off debt. Japan is prepared to extend debt, but for its own internal accounting reasons it is deeply reluctant to write it off. The United States has often had the same difficulty. However, it has now established the principle of debt relief and will be meeting the Trinidad terms. That is a distinct move forward.

    We agreed, as a result of discussions, that we would ask the Paris Club to look afresh at further help for the poorest countries. That will involve the Trinidad terms countries in particular. I expressed the view that I hoped that it would look at going well beyond the Trinidad terms and writing off a large proportion of the total stock of debt, not just the stock of debt that becomes due for repayment during the period of an IMF agreement. That would be a substantial addition to write-off for the poorest countries in the world. We shall continue to push for that in the Paris Club.

    The right hon. and learned Gentleman referred to a comprehensive test ban treaty. That does remain a long-term aim. I hope that in due course we shall be able to achieve it.

    The right hon. and learned Gentleman raised a series of points on Bosnia, points that he has raised on previous occasions. I am not sure that there is anything fresh in what he has said today. Although he was quite long on questions, he seemed to me to be a little short on solutions. It may be that he has lost touch with some of the events that are occurring on the ground. In respect of humanitarian aid, he will perhaps have noticed that even this morning my right hon. and noble Friend Lady Chalker announced a further £18.5 million worth of humanitarian aid from the United Kingdom to help people in Bosnia.

    Mr. John Watts (Slough): Did my right hon. Friend impress on the other European Community Heads of State and, in particular, on the President of the Commission, Mr. Delors, that if they are at all serious about reducing unemployment and improving employment prospects they should immediately abandon the social chapter and all similar policies, which would impose unnecessary costs on industry and commerce?

    The Prime Minister: I am extremely sorry to say that Mr. Delors was unwell and was not therefore at the summit. He was represented by Mr. Christophersen, the Vice-President of the Commission, who is aware of the United Kingdom’s views on the social chapter. We did not specifically discuss it, but he is in no doubt whatsoever that we believe that the social chapter would cost jobs, not create them.

    Sir David Steel (Tweeddale, Ettrick and Lauderdale): I thank the Prime Minister for having met an all-party group to discuss the Trinidad terms before he left for the Tokyo summit. How soon does he expect some results from the initiatives that he took at the summit? Secondly, am I correct in understanding that none of the announced tariff cuts will take effect until the Uruguay round of the GATT talks has been completed, and should we not keep that in perspective?

    Thirdly, on Bosnia, will the Prime Minister accept that neither the strong words of the G7 nor the humanitarian package announced this morning will do anything to help the potentially murderous siege of Sarajevo unless the United Nations troops on the ground are authorised and reinforced with resources by their Governments to enable them to break that siege?

    The Prime Minister: On the three points that the right hon. Gentleman made, I hope that the Paris Club will begin soon to discuss the question of further debt relief. How rapidly it will reach a conclusion I am afraid I cannot anticipate. The United Kingdom will push for a comprehensive solution as speedily as possible, but we have run into difficulties. People believe that we have been a little ahead of them in seeking debt reduction in Toronto terms three or four years ago, in Trinidad terms a couple of years ago and now. There are distinct difficulties in other countries. It is possible for some countries to move ahead unilaterally, as we ourselves have done from time to time in the past, but that then diminishes the capacity of those countries to seek what the debtor countries most need, which is a comprehensive write-off of debt by the Paris Club and, where appropriate, by the London Club as well in terms of commercial debt.

    One of the points that I hope all our partners will recognise is that there is no incentive whatsoever for many of the poorer countries to continue to try to lift themselves out of their present difficulties if every element of their increased prosperity is then utilised to pay off an increasing level of debt interest on an increasing capital sum. I hope that it will be possible to have a substantial write-off.

    On tariff reductions, the right hon. Gentleman is entirely right : nothing, in the famous terms, is agreed until everything is agreed. The hope and expectation is that the deadline will be in the middle of December–

    Mr. Dennis Skinner (Bolsover): Again.

    The Prime Minister: The hon. Gentleman says, “Again”, and he is right to be sceptical about it. We have done it, but we now have movement that we have not seen in the past with the fast track renewal in the United States and the breakthrough on access talks. I hope that we will get it concluded in December of this year. On the question of Sarajevo, the right hon. Gentleman knows the Government’s position. I am not in a position to offer fresh troops.

    Mr. John Biffen (Shropshire, North): The Prime Minister has clearly had a most excellent Tokyo summit, but may I congratulate him in particular on the work that he intends to undertake to make such gatherings much less structured and, hopefully, much less frequent? Is he aware that in certain circumstances travel narrows the mind and that there is nothing more absurd in the current circumstances than a gathering of the world’s elite, discussing the nobility of its aims, at a time when right across north America and Europe there is an all-time record gap between the perceptions of Government and governed?

    The Prime Minister: I strongly share the views expressed by my right hon. Friend. It may be that one of the reasons for that gap between the public and the politicians is an excess of summit fatigue, where people meet together without a realistic expectation of actually achieving what may have been expected from a summit of that sort.

    I am delighted that colleagues have accepted many of the ideas for simplifying the summit process. I must confess that I did not achieve all the ideas that I wanted. I say with some trepidation, with my right hon. Friend the Foreign Secretary sitting beside me, that I had hoped to restrict the summit to Heads of Government only and not Foreign Ministers and Finance Ministers. However, those of our colleagues with coalition Governments felt that they should continue to attend.

    Mr. Robert Sheldon (Ashton-under-Lyne): Is the Prime Minister aware that one of the advantages of these summits is revisiting, again and again, the continuing problems that face the world? Will he accept that what is needed now is the necessary pressure on Japan to reduce its balance of payments surplus and the essential requirement to move the GATT forward? The excessive trumpeting of success does not suggest that we have the GATT problem fully in mind.

    The Prime Minister: We are well aware of the importance of the GATT round and no one in this House has been in any doubt about that for the past two years. Well over 100 nations are engaged in the Uruguay round talks. That makes it extremely difficult to reach agreement. As I indicated earlier, the talks are much wider and much more comprehensive than any previous trade talks. They include services and agriculture, and that has not been the case in the past. Those extensions are very welcome.

    One point which deserves to be made is that many of the Cairns group of countries–in industrial terms, rather smaller countries–reached their GATT agreements three, four or five years ago and they have held to them. Their frustration at the difficulty of the United States and Europe in sticking to agreements that they reached months ago is entirely justified. I very much hope that we will be able to do that and also reach an agreement.

    The point about revisiting problems is entirely right. However, it is not desirable to revisit them on occasions when there seems to be no practical opportunity of doing anything about them unless the revisiting is on the basis that I have proposed for the future–much more informal discussions.

    Sir Peter Hordern (Horsham): Will my right hon. Friend confirm that, while the agreements in Tokyo are to be welcomed, there is no question but that a general reduction in tariffs is to be preferred to a series of bilateral agreements reached between different countries such as the United States and Japan? Does my right hon. Friend agree that the main purpose must be to achieve a reduction and success in the Uruguay round in agriculture? Will he confirm that no single country has the right of veto in such negotiations?

    The Prime Minister: I would certainly confirm that. In terms of the European Community, an agriculture agreement is available by qualified majority vote. One hopes that that would not be necessary and I hope that, at the end of the negotiations, the advantages there for every western European country in industrial matters will ensure that no one would seek to block it on the grounds of agriculture. We need an agreement on agriculture. It will be a novelty to have one and it would be a very remarkable breakthrough if it were achieved. With regard to my right hon. Friend’s earlier point, a general agreement is infinitely to be preferred to bilateral agreements. Bilateral agreements are of little help to many of the developing countries.

    Mr. Gerald Kaufman (Manchester, Gorton): In his bilateral talks with President Clinton, did the Prime Minister discuss the United States ban on British nuclear tests in Nevada? Did he remind President Clinton that a year and a quarter ago this Government told the country that nuclear tests were indispensable to British security? Will the right hon. Gentleman tell the House whether British nuclear tests are still indispensable to British security, and will he give a clear yes or no?

    The Prime Minister: In fact, I discussed that with President Clinton a few days before we went to Tokyo and we spent some time discussing it. The ban has been extended for a further year. We will wait and see whether other people outside the United States sphere of influence continue testing, in which case I think that the United States and we would as well. In that year, we are seeing whether we can find alternative ways of managing without the necessity for the tests. Some think that we can do that and we are still examining that. The scientists are as yet uncertain. I hope that it will be possible.

    Mr. Patrick Cormack (Staffordshire, South): Although I congratulate my right hon. Friend on a very successful summit, may I press him again on Bosnia? Does he accept that, since the Washington declaration, events have deteriorated markedly, that no extra protection has been given to those in safe havens, and in Sarajevo in particular, and that that great European city stands on the brink of total collapse in the most atrocious conditions seen anywhere in Europe since the end of the second world war? There were some tough words in the declaration on Bosnia. Is my right hon. Friend prepared to say that they will be followed by action to try to save Sarajevo?

    The Prime Minister: The Secretary-General, as my hon. Friend will know, is actually mustering troops at the moment in terms of the resolution, the number of which escapes me for the moment, on safe areas which was passed some time ago. We ourselves have provided troops; we have had troops in Bosnia for some time. We look forward to other people doing so as well so that that resolution can be carried out.

    Mr. Frank Field (Birkenhead): Given the importance of the level of world trade to British prosperity, may I welcome the small but important movements in the GATT negotiations that the Prime Minister announced this afternoon? May I remind the Prime Minister of the answer that he gave recently to the House, that one of the Government’s objectives was to establish full employment? Is he aware that it is a long time since the House has heard that as an objective of Her Majesty’s Government? Does the Prime Minister accept that, although many people have very useful ideas on how we could marginally increase the number in employment, nobody but nobody in the western world has any idea how to achieve his objective? When Britain faced exactly the same situation in the 1930s, the then Prime Minister sounded a note of urgency by initiating a national debate and having that debate reporting directly to him. Will he consider a similar initiative so that when the British delegates go to Camp David they can go armed with new ideas, bringing hope to our constituents, some of whom have waited 10 years or more in the dole queues, rather than acting as mere intellectual bag carriers of other nations?

    The Prime Minister: I am grateful to the hon. Gentleman for what he had to say in his opening remarks about GATT. It was, of course, this country that raised at Copenhagen the significant question of employment across Europe and the long-term trend.

    What is of increasing concern when one strips away the effect even of the recession is that right the way across Europe–not just in this country but right the way across Europe–from about 1970, under Governments of both parties, and at one stage two parties at once, there has been a general increase in unemployment. Worse than that, there has been a corresponding increase in long-term unemployment that is centred particularly upon low- skilled or unskilled males. That is not a British phenomenon; it is a phenomenon that one can see to a greater or lesser degree across the whole of the industrialised world, with the exception of Japan, where different circumstances apply.

    We did raise the issue in Copenhagen. I raised it again in Japan. We will most certainly contribute forcefully both to the White Paper in Europe and President Clinton’s discussions later on this year. Some jobs will certainly be created by supply side reform, some by growth, but there is not an automatic equalisation between growth and jobs, as hon. Members will realise. On any That is certainly our objective.

    Sir Teddy Taylor (Southend, East): As the substantial and exciting tariff reductions that my right hon. Friend the Prime Minister fought so hard to achieve can be frustrated if the GATT round breaks down, what on earth can we do if the European Community is unwilling to reduce its agricultural expenditure which is currently beating every previous record, with the mountains of food breaking every previous record? Would it not greatly help the GATT discussions that the Prime Minister has worked so splendidly on if some member state within the EC would propose that either the CAP should be scrapped or that individual nations should be entitled to disengage from it? Would not that help my right hon. Friend the Prime Minister in the fantastically good job that he did at Tokyo?

    The Prime Minister: I am grateful to my hon. Friend for his helpful contribution. The Government agree with him on the need for CAP reform, and there has been some reform of the common agricultural policy. No doubt more will be necessary, but we will certainly endeavour to persuade all our European partners not to stand in the way of a comprehensive trade agreement.

    Mr. Tam Dalyell (Linlithgow): In his opening statement, the Prime Minister referred to discussions on the behaviour of Iraq. What hard evidence did either the Americans or President Clinton give about the involvement of the Iraqi state in the so-called attempted assassination of President Bush in Kuwait? Is it likely, if it was Saddam Hussein’s handiwork, that the would-be assassins would run out of petrol and not know where the university of Kuwait was? Will he be very careful before endorsing further military action and the launching of missiles on Baghdad?

    The Prime Minister: I will send the hon. Gentleman a copy of the remarks concerning the behaviour of Iraq that were made recently by Ms Albright at the Security Council of the United Nations, which I think he will find of some interest. In the past couple of days, we have also seen obstruction of the United Nations weapons inspectors. I think that is a provocation. It stands in stark contrast to Iraq’s obligations under Security Council resolutions and, clearly, that matter will now have to go back to the Security Council.

    Sir Peter Tapsell (East Lindsey): May I ask my right hon. Friend– who always represents Britain at meetings of Heads of Government with distinction–a similar question to that which I asked him when he returned recently from the European summit in Copenhagen? What is the point of repeated high-flown communiques drawing attention to the urgent need to reduce unemployment, when its principal creator, the central bank of Germany, is outside democratic control? Has my right hon. Friend, with his usual tact, reminded his German colleagues of the fact that it was not inflation but unemployment that brought down the Weimar Republic and put Adolf Hitler into power?

    The Prime Minister: I cannot say that I made that particular point in that fashion at the summit discussions, but we indicated the importance that we attach to unemployment when we were in Copenhagen, bilaterally with other European and other Heads of Government, and again in Japan. I think there is a level of understanding about the concern that people feel about the problem that did not exist even a few months ago. I know that my hon. Friend’s remarks will be read carefully in other places.

    Mr. Dennis Skinner (Bolsover): Is not there an air of unreality about the fact that the Prime Minister had to go all the way to Tokyo to tell us that they have discovered unemployment in Britain? If he had asked in any region of the British Isles, he would have found out that everyone knows that there is a lot of unemployment in Britain. Instead of swapping advice with other Heads of State about how to fiddle the figures in different countries, and talking about level economic playing fields when there cannot be such a thing in the world, why does not he do something here at home, and save the pits, stop shutting the shipyards, save the engineering base, reintroduce exchange controls and introduce import controls? That is the way to save jobs in Britain.

    The Prime Minister: I am sure that someone would have made a similar speech following the invention of the wheel.

    Sir Anthony Grant (Cambridgeshire, South-West): Did my right hon. Friend make it clear at the summit that there will be no deeper involvement of our limited forces in Bosnia, or any mad adventure there, notwithstanding the blandishments of the armchair television warriors on the other side of the House? Will he suggest to them that, if they want a deeper involvement, they had better go out there and serve themselves?

    The Prime Minister: I have said on a number of occasions that we have made a contribution in terms of troops to humanitarian aid. There has been a call by the United Nations for more troops. I think that that call should be met by those countries that have not yet contributed.

    Mrs. Margaret Ewing (Moray): While I recognise that every Member of the House will welcome the fact that the GATT round of talks seems to be under way again, will the Prime Minister say whether he believes in his heart of hearts that a conclusion can be reached by mid December?

    As to the agreement on Scotch whisky reached by the quadrilateral partners, does the Prime Minister accept that throwaway remarks suggesting that it will be to the benefit of Scotland really mean that it will be to the benefit of the Exchequer? While the agreement may help to retain jobs in the whisky industry in Scotland, it will not create them. The issue underpinning that industry, which is a major exporter, is the need to eradicate the internal excise duty levied by Japan, which disadvantages Scotch whisky and other spirits produced in this country by £4 to £6.

    The Prime Minister: As to the hon. Lady’s first point, I think that a settlement can be reached. I cannot be certain because many complex matters have yet to be determined. I am in no doubt now that one can be reached, and I am delighted that the talks in Geneva recommenced this morning.

    As the hon. Lady said, there are two elements in the difficulties faced by Scotch whisky in the Japanese market. One is the external tariff. When a settlement is reached, it will disappear entirely–100 per cent. of the external tariff will go. The other is the internal taxation level. We have been pursuing with the Japanese–and I did so again with Prime Minister Miyazawa–the high level of taxation on Scotch whisky. We will continue to do that in the hope of having it reduced. There has already been a significant reduction, or there will be, with the removal of the external tariff.

    As I said in my statement, £170 million of exports go to Japan. As Scotch whisky will in future be cheaper, it is likely that exports will increase. That will certainly safeguard jobs, and I am not sure why the hon. Lady is so certain that it will not create them as well.

    Mr. Andrew Rowe (Mid-Kent): Is my right hon. Friend aware that perhaps the most popular policy being pursued by his Government at the moment is that of deregulation? It would be even more popular if it were more widely known. Can my right hon. Friend assure the House that he was able to persuade his G7 partners that that is a popular and necessary part of a world policy, which will make the lives of small businesses in particular rather more fruitful in future?

    The Prime Minister: They seemed persuaded. We shall see whether action follows the gentle response when I made that point in discussions. I believe that there is an understanding that there need to be supply side changes to create employment. One important change, as my hon. Friend said, is deregulation.

    Mr. Calum Macdonald (Western Isles): On the question of Bosnia, the Prime Minister has sometimes given the impression that all the expert advice that he receives is that the west should not get involved in using military force to deter territorial aggression, first in Croatia and then in Bosnia. Will the right hon. Gentleman confirm whether that is the uniform advice that he is receiving, or do senior diplomatic and military figures say that we could and should use military force to stop the slaughter in the former Yugoslavia?

    The Prime Minister: I have received no advice either from senior diplomats or from military figures that a solution could be imposed by military force.

    Mr. Edward Garnier (Harborough): Will my right hon. Friend accept the congratulations of my constituents, who are heavily involved in the textile and agriculture industries, on the results of the Tokyo summit? We are pleased at the 50 per cent. reduction in textile tariffs as against the United States. However, if that agreement cannot be put in place by December, does he understand that there will be a need for further reductions in the 50 per cent. tariff ratio so that we may achieve far better exports of British textile goods to the United States.

    The Prime Minister: I agree with my hon. Friend. I hope that we will achieve the settlement by December. In any event, that is not the end of the matter. Although a 50 per cent. reduction in tariffs is certainly welcome, we would have preferred a larger reduction–but that was what was negotiable on that particular occasion. I hope that we will return to that matter and seek an even larger reduction in the tariff, up to its complete elimination.

    Mr. Peter Mandelson (Hartlepool): Perhaps I may pursue the question put by my hon. Friend the Member for Birkenhead (Mr. Field), in response to which the Prime Minister seemed to be well intentioned and sincere in his desire to reduce unemployment but vague as to what he would do. Will the right hon. Gentleman share with the House a little more what new specific policy and initiatives the Government are currently examining which they may take to any new employment summit in the autumn?

    The Prime Minister: As I said earlier, there was a range of matters to deal with unemployment. One is deregulation, which has just been mentioned. Not to impose extra costs on employers, as the social chapter would, is a second illustration of what needs to be done. Other measures include policies that will enable the economy to grow–as we have been seeking to do–and to protect capital investment, as we did in the previous public expenditure round. There are also the international macro points that I mentioned earlier : the United States is tackling its budget deficit, Japan will continue to support domestic demand as necessary, and in continental Europe there will be a move towards a reduction in interest rates. The necessity and attraction of closing the fiscal deficit in this country, as in other countries, is that it will be easier to make further interest rate reductions.

    Dr. Ian Twinn (Edmonton): Is my right hon. Friend aware of the positive and warm support he receives from Conservative Members for the achievements of the summit, especially the progress towards freer world trade and the greater advantage that that will have for our manufacturing industry? Will he now renew his efforts among our European partners to ensure that they all share our enthusiasm for free world trade?

    The Prime Minister: Yes, I will certainly do that. A number of our European partners are also firm advocates of free trade. There are one or two who are slightly less firm in their advocacy and we shall endeavour to encourage them. We are not the only advocates of free trade in Europe; a number of other nations wholly share our views.

    Mr. Bob Cryer (Bradford, South): How much of the money that has been allocated to Russia will go towards helping to dismantle its nuclear weapons? Would not it impress the other G7 countries if, instead of talking about the nuclear non-proliferation treaty in glowing terms, the Prime Minister did something about it by introducing a programme in the United Kingdom to shift our manufacturing base away from producing weapons of war to manufacturing for peace and getting rid of Trident nuclear weapons? On the basis of his argument, our jobs will depend on either the manufacture or maintenance of weapons of mass extermination for the next 20 years. Is that his policy?

    The Prime Minister: The hon. Gentleman refers to weapons of mass extermination, when nuclear weapons act as a deterrent to protect the nation. That is their purpose. If the hon. Gentleman is so keen for us not to manufacture them, I hope that he will make that point equally clearly in Barrow and Devonport and that he has previously made it in Rosyth. His point rings with a rather curious air against representations made by many of his hon. Friends during recent months.

    Mr. Cryer: What about diversification?

    The Prime Minister: On the question of Russia, to which I was just coming, we are already helping the Russians with the transport of nuclear weapons and with technical help on their destruction. That is of importance to Russia, and, as his right hon. and learned Friend the Leader of the Opposition mentioned earlier, it is important to Ukraine, where further progress needs to be made.

    Mr. Tim Devlin (Stockton, South): As my constituency is not far from that of the hon. Member for Hartlepool (Mr. Mandelson) and as it produces pharmaceuticals, chemicals, engineering products and other products that fall into the eight areas on which, it has been agreed, tariffs will not be imposed in the future, may I warmly congratulate the Prime Minister on negotiating away those tariffs ? I hope that he will bring as much pressure to bear as he can to end the GATT round as soon as possible.

    The Prime Minister: I am grateful to my hon. Friend. I certainly undertake to do that, and I am grateful for his earlier remarks.

    Mr. Cynog Dafis (Ceredigion and Pembroke, North): I noted with interest the Prime Minister’s reference to the Rio accord, which is intended to underpin all economic and trade policies henceforth. I wonder whether the Prime Minister is aware that a recent United States district court ruling meant that the north American free trade agreement could not be ratified because it did not include an environmental impact statement. Is not it possible that a similar fate might await the GATT agreement and that that could unravel the whole round? In that case, will the Prime Minister give some detail about the nature of the environmental discussion in Tokyo and the effect on the agreement there?

    The Prime Minister: One of the significant points made in the discussion on the environment at Tokyo was that President Clinton pledged himself wholeheartedly to the Rio accords. That was a shift of policy for the United States and one that was very welcome. As the hon. Gentleman may know, much work has been going on following Rio to produce national plans for sustainable development, for dealing with climate change, for biodiversity and for forests by the end of 1993. There have been meetings of the United Nations commission on sustainable development; the most recent was in New York last month. Developed and developing countries are now working together actively to put the Rio commitments into practice. Rio is becoming a reality.

    Mr. James Clappison (Hertsmere): Does my right hon. Friend agree that many of the issues that figured most prominently at Tokyo, such as cutting deficits, deregulation and improving the flexibility of the labour market, were issues of British concern? Just as at Copenhagen, the agenda reflected Britain’s concerns. Does my right hon. Friend further agree that there is growing evidence that Britain’s case is prevailing, both in Europe and in the rest of the world?

    The Prime Minister: My hon. Friend is entirely right about that point. It was very striking in the Copenhagen discussions just a few weeks ago and it was equally evident in our discussions in Tokyo last week. One of the reasons for that is that we went into the recession earlier than many other countries did. There is nothing like a recession to concentrate people’s minds on the reality of what needs to be done. Many countries, now that they are entering recession, are having to look, just as we have done, at some very hard decisions to help people and to recreate jobs.

    Mr. John Spellar (Warley, West): The Prime Minister conceded earlier that Japan was not experiencing high levels of unemployment. While he was in Tokyo, did he take the opportunity to look at what is happening in Japan? Did he notice, for example, that the Japanese are spending $70 billion in public works programmes to expand the economy? Did he notice that Japanese employers are trying to hold on to their workers and are not taking every opportunity to cut the work force? Did he notice that they are not as obsessed with the flexible labour market ideology? In fact, the Japanese Government and Japanese employers cannot understand all the fuss about the social market. Did the Prime Minister notice that, in spite of all that, it is the Japanese who have the substantial balance of payments surplus and that it is we who have the balance of payments deficit? When will he abandon the outdated Thatcherite philosophy and look at what really works in this world?

    The Prime Minister: The hon. Gentleman may care to study Japan a little more closely before he entirely advocates that. He might, for example, not be entirely happy if we reduced our public spending share of gross domestic product to the Japanese level. That would make a significant difference and one that would be pretty unwelcome to the hon. Gentleman. If he looked at the social costs in Japan, he might also be just a little less enthusiastic. If he looked at some of the wage levels in parts of Japan, he might be a good deal less enthusiastic. I suggest that the hon. Gentleman spends his holiday in Japan.

  • Mr Major’s Pool Interview in Tokyo – 7 July 1993

    Below is the text of Mr Major’s pool media interview held in Tokyo on Wednesday 7th July 1993.

    MICHAEL BRUNSON:

    Prime Minister, the agreement at the so-called quad talks, very very big tariff cuts. Are you cracking open the champagne, throwing your hat in the air?

    PRIME MINISTER:

    I am certainly very pleased. They are very large tariff reductions indeed and across a very wide range. It is what we have been seeking for a long time and for an external trading nation like ourselves who live by our exports it is extremely important, not only big tariff cuts but big tariff cuts where we wanted to have them.

    MICHAEL BRUNSON:

    Tariff cuts and all of that, it doesn’t mean a great deal I suspect to the man-in-the-street and woman-in-the-street. What does it actually mean in terms of how it will affect life in Britain?

    PRIME MINISTER:

    Let me try and illustrate that. I said the tariff cuts are in areas of importance to us. People who work in the ceramics industry, the glass industry, people who produce high-quality textiles will now find that markets like the United States that were difficult for them are open to them, they will be able to export more, produce more and that is going to create jobs.

    It is very difficult to be precise as to what this will mean for jobs over the next decade or so, it is very much a rule of thumb guess at the moment but on the basis of the calculations others have done, including the United States, I would think probably we are talking over the next decade or so of an extra 250,000-plus jobs, perhaps 350,000. That does mean something to people in this country.

    ROBIN OAKLEY:

    Prime Minister, this is a package of agreed measures, is not yet an agreement. What badgering and bullying have you got to do to turn this into a full GATT agreement?

    PRIME MINISTER:

    85% of the GATT agreement is now practically together. I think the first thing to say is that these trade talks are infinitely bigger than anything we have seen before, it touches all sorts of areas that simply were not covered by agreements like this before. 80-90% of it is now in place. There is still a good deal more to be done. We hope we can push that through during the rest of this year. A lot to be done, it will be difficult but the prize at the end of that is very substantial for all of us, for the United Kingdom and for every other trading nation.

    ROBIN OAKLEY:

    One of the biggest problems may be with one of your European Community partners. Do you think the French can be persuaded to go along with this or could they yet sabotage the whole GATT agreement?

    PRIME MINISTER:

    I very much hope so. The French, like ourselves, are an industrial nation as well as being an agricultural nation. They too have very great interests in the industrial aspects of this particular agreement and in the service aspects so there is a lot in it for France. They still have some reserves – some concerns – about agriculture; these are matters that hopefully will be sorted out during the rest of the year. Quite apart from that, France has very great interest, as well as us, in a satisfactory agreement.

    ADAM BOULTON:

    The Americans have suggested that President Clinton should take most of the credit for this. Mickey Kantor said that he concentrated everyone’s mind. Who do you give the credit to for achieving this breakthrough?

    PRIME MINISTER:

    I think everyone has been working. We certainly have been working for this, as you know, for a long time. I recall raising it at the Houston summit two years ago. I have sat there at three successive GI summits at which we have pledged ourselves to get an agreement and we have then gone away and pushed and pushed for an agreement. I don’t think anyone doubts in the European Community that Britain has pushed more forcefully for an agreement than any other European Community nation but I think everyone is entitled to a share of the credit if and when it is finally sewn up. It isn’t yet finally sewn up, when it is done, let us all then be grateful for it.

    ADAM BOULTON:

    Is this perhaps an occasion when the much maligned G7 jamboree has actually worked, that the leaders have got together and concentrated their political will and that has put pressure on the negotiators?

    PRIME MINISTER:

    I think the fact of the meeting has certainly put huge pressure on the negotiators. It has been clear for some time that we actually needed this agreement on market access, the reduction of tariffs, by the time of this particular meeting and I think each of the G7 Heads have put a considerable amount of pressure on the negotiators to reach an agreement so yes, I think it has helped a great deal.

    MICHAEL BRUNSON:

    But isn’t it true that this whole GATT saga, which has been going on now for five or six years or something of that sort, is littered with false dawns? I remember for example in Washington you were issuing ultimatums telling everybody to wrap it all up in a fortnight. How can you be certain that it is going to stick this time and that people will be signing agreements in Geneva say in December?

    PRIME MINISTER:

    Well, of course, it is precisely because I was issuing ultimatums some time ago and others as well that we have actually pushed forward and dealt with the problems that then existed. There were problems, it looked like it was blocked, we pushed it, we have moved forward. That is exactly what we must do in the next few months.

    People mustn’t underestimate what this will mean. If there is one single thing that will give a boost to confidence and world trade and as a consequence of that growth and jobs and prosperity it is a successful outcome to the Uruguay Round. It is quite the most important thing we have had for many years so there is a huge prize there; everyone must push for it.

    MICHAEL BRUNSON:

    But you really think come December people will be putting names, signatures, on paper, say, in Geneva?

    PRIME MINISTER:

    It won’t be for lack of effort by the British if they are not. I certainly hope so.

    ROBIN OAKLEY:

    This could be the last summit of its kind if you have your way. What exactly are the reforms that you want to see in the G7 summit process and what support are you getting for them?

    PRIME MINISTER:

    I just want to make it more informal. I think the idea of the Heads of Government and perhaps on occasions other Ministers getting together to talk about matters that affect all of us in what economically is a shrinking world is a very good idea. I don’t object to that at all. The better Heads of Government get to know one another, the safer world we will all live in. What I do want to cut down is some of the jamboree aspects of these very large gatherings, perhaps too much ceremony, perhaps too many artificial additions to communiques at the end of our discussions.

    What is vital I think for everyone is that Heads of Government can have close contact and can speak freely and frankly to one another about problems. I don’t want that artificially pre-cooked. I want them to have the opportunity of free and open conversation so I would like a great deal more informality on these occasions in future.

    ROBIN OAKLEY:

    A lot of you are suffering from political traumas at home. Indeed, this meeting has been described as a meeting of the world’s strongest countries and the world’s weakest leaders. Do you feel that your clout is weakened here by the fact that there is an opinion poll at home this morning calling you the most unpopular Prime Minister this century?

    PRIME MINISTER:

    It is true of everyone here, not some people here. Everyone here is facing precisely the same problem. There is a malaise about. People are concerned. I think it is partly a result of the recession and it spreads right the way across the industrial world. People are concerned. We had many years in the 1980s when across the industrialised world there was steady growth, each year people felt a little better off, there was security, a certainty.

    Suddenly the recession has cut that off and people are bewildered I think, they are not quite sure what has happened. In each individual country, they believe it is solely the responsibility of their particular government. When we meet together, as you have just observed, all these governments are in exactly the same position and we need to work together to bring the world economy round out of this recessionary phase and back into growth. That is what people want – certainty, confidence, growth, prospects and hope again – and that is what we are seeking to provide.

    ADAM BOULTON:

    President Clinton also picked up on that notion of a malaise. Pointing for example to Italy and Japan and indeed to the United States, he said that the malaise has been something which has forced the politicians into reforms and he cited funding changes in the United States. Why is it that you don’t think the British system needs reform when so many others are changing?

    PRIME MINISTER:

    But I have been arguing for a whole series of economic changes. I did so at Copenhagen and I am doing so here again. I think we have to address some of the long-term problems that have been there that perhaps were masked by the buoyant growth there was across the world through much of the 1980s. Once one strips that away – and the recession has effectively done that – I think you can see some structural problems in each and every one of the nations gathered here at the G7 that need to be dealt with.

    We have been discussing that today. The malaise you refer to has been referred in our discussions today by almost every Head of Government. It isn’t uniquely a British phenomenon, it is a worldwide phenomenon. People are now beginning to address it. I think that is very attractive and the more we address it the more we can explain to people why there are difficulties and how we propose to get out of the difficulties, the more likely we are that they will give us their support in doing so.

    The seven nations gathered here have I think beyond doubt the most sophisticated electorates in the world. Let us explain to them what the long-term difficulties are and how we propose to get out of them. Some of the ways of getting out of them may be difficult, they may be painful but if people know what the problem is and what the solution is, I believe they will accept that solution provided they are satisfied it is in their interests and in the interest of their country to do so.

    ADAM BOULTON:

    With reference to Britain, what are those long-term changes and painful changes which people should be facing up to?

    PRIME MINISTER:

    There are a series of things that I have been talking about for some months and they won’t be particularly fresh to you. We certainly have to get rid of the fiscal deficit that we have – the fact that the Government is spending a good deal more than its revenues will allow – that has to be dealt with. We have to look at many of the costs that are in danger of rendering all of European, including British, industry uncompetitive to Japan, to the United States and to the Pacific Basin. We have to look at regulation, red tape, those frustrating controls that prevent small, medium and large-sized businesses from expanding and creating the jobs we need. That is an illustration of the changes we need, by no means an inclusive list but those are the sort of things we all have to address if we are to get our economies growing in the way we want to see them grow.

    ROBIN OAKLEY:

    Bilateral meetings on these occasions can be as important as the main round-table sessions. President Clinton, while he has been here, has been putting all the emphasis on relations between America and Japan and America and Asia. Do you feel that the United States has a new focus and are you worried about the state of the special relationship after the differences with the US on Bosnia?

    PRIME MINISTER:

    Not in the slightest. The United States and the United Kingdom have a community of interests. We are very close together. We have a common outlook on almost every problem, of course not every one but on almost every problem around the world we have a common outlook. We are in regular contact at all levels of government, not just my level speaking regularly to President Clinton, the Foreign Secretary, the Chancellor of the Exchequer, at official level, We have far closer contact with the United States than they would have with many other countries. Of course, on these occasions they seek to make up that deficit of contact with people when they are here. We have that contact all the time. I see no difficulty at all now, there hasn’t been in the past, isn’t now and won’t be in the future over that very close identify of interests and common interests that we have with the United States.

  • Mr Major’s Doorstep Interview in Tokyo – 7 July 1993

    Below is the text of Mr Major’s doorstep interview in Tokyo, held on Wednesday 7th July 1993.

    QUESTION:

    Prime Minister, what can you us about the movement we hear reported from the so-called Quad talks, does this mean that GATT is on its way?

    PRIME MINISTER:

    It looks as though it may, yes, it looks as though the talks have ended satisfactorily, I do not have all the details yet so I will spare you the details I do have, but it does look as though it is probable we will now have a market access agreement. That is important not just in itself but because it means we can then move forward to the multilateral talks back in Geneva and towards a GATT settlement, that is very important. It sounds technical but what it means is more trade, open market and more jobs, so it is very important.

    QUESTION:

    In short, why does it matter?

    PRIME MINISTER:

    It matters precisely for the fact that it will actually create jobs. If one can free up world trade there will be more world trade, the more world trade there is the more goods need to be produced, the more goods are produced the more people are working producing them, so in a single word it means jobs.

    QUESTION:

    Does it mean a transfer of jobs away from Western and developed economies?

    PRIME MINISTER:

    No I do not think so, that point is sometimes put, doesn’t it mean a transfer of jobs? But a general growth of trade, which is what a satisfactory agreement on GATT will mean, removing trade barriers and removing tariffs, that will help people in every country around the world and I think it will mean more jobs around the world. The estimates are that it will increase world trade very substantially, it removes barriers to many British exports when it is concluded, textiles for example, Scotch whisky perhaps, a whole range of areas that are of very great importance to us. Undilutedly good news when the round is completed, today it looks as though we have made a further step forward.

    QUESTION:

    How much extra bullying would you now need to do to turn a Quad agreement into a proper GATT agreement and are you worried that the French Prime Minister is not here?

    PRIME MINISTER:

    The French President is here. There is a lot of badgering being done over the last couple of years, no-one is in any doubt at all about the importance that the British have given to this particular settlement, it has gone on for some time. I wish we had settled the whole matter last year or the year before, but we have not. We have now made a great deal of progress. A substantial amount of a final agreement is already in place, there is still quite a lot to be done hut one ought not to overlook the amount that is now already in the bag and is agreed. We will just have to push and push and push, however unpopular it makes us, to try and get a final settlement later on this year.

    QUESTION:

    This will nevertheless have to go through the European Council, are you confident that all twelve member states of the Community will be on side on this and that means specifically the French?

    PRIME MINISTER:

    It is actually agreed by qualified majority vote, it does not need unanimity in the European Community, it is a matter that is dealt with by qualified majority vote.

    QUESTION:

    You are confident the Community will agree it?

    PRIME MINISTER:

    I think it would be folly if the Community were not to agree to go forward.

    QUESTION:

    Do you think we will get agreement by the end of the year?

    PRIME MINISTER:

    I very much hope so, the prize is very great. If there is one thing around the world that people are concerned about it is to see an increase in the growth of world trade, an increase in confidence and the creation of jobs. There are 23 million people in the G7 countries who are without work, there are 17 million people, rising, in the European Community without work. Now here is the biggest single policy change that can help to create new jobs, everyone should snatch at that.

    QUESTION:

    What are you likely to say in the world economy debate this afternoon?

    PRIME MINISTER:

    I think we have to remove many of the barriers to growth, there are a whole range of them, one of them of course is the trade barriers that we have been talking about that are subject to negotiation in the GATT round, others are the degree of deregulation that exists, there are a whole series of supply side changes that are necessary, a greater concentration on skills and education, a whole raft of things that I will set out this afternoon. But in essence we have to address long term problems that have suddenly become clear across the world as a result of the recession, if we address those problems now we will set the right basics in place for growth throughout the ’90s and greater prosperity in the ’90s. So it is removing those barriers to growth that I regard as the most important thing.

    QUESTION:

    It is deregulation really?

    PRIME MINISTER:

    Deregulation is a part of it, it is by no means the sum total of what needs to be done, but deregulation is certainly an important part of it.

    QUESTION:

    You have a bilateral today with President Clinton, after the disagreements on Bosnia and the American decision on nuclear testing, how much patching up have you got to do?

    PRIME MINISTER:

    There is no need for patching up. President Clinton and I speak regularly on the phone, we had a very lengthy conversation about this particular summit and related matters on Saturday, we will be meeting in the margins of this particular summit to discuss a range of things. There is no patching up job to do, there is a whole raft of areas where we are in complete agreement and I suspect the principal agenda for this summit is one of those areas where we are in total agreement.

    QUESTION:

    [Inaudible] changing the balance of power in the world, how hard are you having to fight to maintain Britain’s position at the table at G7 and at the UN?

    PRIME MINISTER:

    I am not having to fight at all hard, Britain’s place at the G7 and at the United Nations is entirely secure, the only time it is ever questioned is when people like you ask me questions like that, otherwise it is not in any doubt whatsoever.

    QUESTION:

    Why is the New Statesman settlement so low for you personally?

    PRIME MINISTER:

    The important thing in the New Statesman settlement, and all the other elements of that settlement, was that people acknowledged that the libel was untrue, that has been acknowledged, everyone concerned has now paid damages. The size of the damages was never a relevant factor, the confirmation that the stories were untrue and unfounded was the relevant factor, that has now been obtained from everybody concerned with the case, those who spread the libel, those who printed the individual publications, all of them have now indicated that it is unfounded and untrue, I am satisfied with that, it is now no longer an issue I need concern myself with, it is dead and gone.

    QUESTION:

    But the New Statesman is claiming a moral victory and there is a suggestion that you have accepted these low damages in order to avoid appearing in the witness box?

    PRIME MINISTER:

    It is a curious moral victory when they admit it cost them a quarter of a million pounds in total, that is a very curious moral victory. They have admitted what they said was unfounded, they are not in a position to repeat, they cannot repeat it, it has cost them a quarter of a million pounds, if that is a moral victory it is not the sort of moral victory they would like every week.

  • Mr Major’s Doorstep Interview in Tokyo – 6 July 1993

    Below is the text of Mr Major’s doorstep interview held in Tokyo on Tuesday 6th July 1993.

    QUESTION:

    Prime Minister, President Clinton has talked today of the crisis of slow growth in the developed world, what are you going to be able to do about it here?

    PRIME MINISTER:

    I think he is right about that. Right the way across Europe, in Japan, in the United States, right across the industrialised world there has been very slow growth, the only thing that has grown faster of course has been unemployment and there are 23 million people unemployed amongst the G7 nations here. So I think we have to make that a centre-piece for the discussions we have over the next few days. No-one is suddenly going to find a magical solution that will put all those people back into work but what we do need is to make sure all countries have the right policies to produce growth. Britain is coming into growth, I want to see other countries coming back as well.

    QUESTION:

    You said after Munich that you would badger and bully until the GATT negotiations came to a solution, who do you blame for the fact that that solution has not yet been achieved?

    PRIME MINISTER:

    I am not in the business of distributing blame. What I am in the business of doing is continuing to badger and bully, we do need a settlement, it is no less vital now than it was months ago at Munich, no less vital than it was a couple of years ago and I think it is important we make some progress. I very much hope that by the end of this summit we will have a market access agreement opening up markets, lowering tariffs, increasing trade and enabling more jobs to be created. I hope that we will have that and I hope we will also have an agreement that we can return to the multilateral trade talks in Geneva, that I hope will be achieved this week. It will not be easy to achieve, there will undoubtedly be difficulties, that is perfectly clear, but I think that is what we must aim at.

    QUESTION:

    Is it conceivable when there has been a failure for 4 years to sort out the GATT talks?

    PRIME MINISTER:

    I think you need to ask the people who have not been able to reach agreement, it is not the British.

    QUESTION:

    [Inaudible].

    PRIME MINISTER:

    It is not the British, there are other people who have particular difficulties in their own countries, the Cairns Group by and large can sign up to the agreement, there are other countries that cannot, we are urging them to do so. I believe that Britain could reach a final agreement on the trade talks very speedily, we will be encouraging other people to do the same.

    QUESTION:

    A domestic question, if I may, are you going to try and repair the defeat on the rail bill in the Lords?

    PRIME MINISTER:

    I have not had a chance to discuss it with John MacGregor yet, I only heard of it as I got on the plane to leave for here, but I think it is probable we will, yes.

    QUESTION:

    You will try and reverse it?

    PRIME MINISTER:

    I think it is probable we will but I have not yet discussed it with the Secretary of State.

    QUESTION:

    The Japanese have indicated today officially that they are putting in a request to join the Permanent Members of the Security Council, would you now be ready to support this?

    PRIME MINISTER:

    We have never ruled out the question of Security Council reform, I think it is something that has; to be taken very gently. There are a lot of ramifications to that, one has to look at the competing demands from a number of countries who would like to become Permanent Members, Japan clearly has a case, there are a number of other countries as well. So I think it is a very wide issue and I think it is one that will involve us for some time in discussion.

    QUESTION:

    What about Bosnia, is this a forgotten subject at this summit?

    PRIME MINISTER:

    I do not think anyone could forget Bosnia, I do not think we could and I do not think we should. It is not the centre-piece or this particular summit, I think the two centre-pieces of this summit, if you can have two centre-pieces, are unemployment and growth and the need for progress in the trade negotiations. But I do not think anyone pushes the horror of Bosnia to one side, it is with us all the time.

    QUESTION:

    The Japanese Prime Minister, when talking to President Clinton, said that the gap between imports and exports are beyond our control, we cannot play with GDP figures. He does not sound like a man who is prepared to do business on this issue?

    PRIME MINISTER:

    No I had not heard that, Michael, no doubt that is one of the many matters we will discuss perhaps most obviously in our first sessions on employment and on the economies. I am sure a range of issues like that will come up.

    QUESTION:

    It is going to take a lot of give and take to get some trade agreement?

    PRIME MINISTER:

    Yes, but I think I had better comment on it after we have had the give and take and we see what emerges from it.

    QUESTION:

    Do you like the idea of a Jobs Summit, as proposed by President Clinton?

    PRIME MINISTER:

    Yes, I have not seen the details of what he has said, I understand he has in mind getting experts together to examine what might be done, I see no objection to that, I think it might be productive. No doubt he will raise it at the summit.

    QUESTION:

    Would you send Britain’s Employment Minister to such a summit?

    PRIME MINISTER:

    I think here we have all got something to learn from one another, I shall certainly be advancing the case for a whole series of supply side changes in countries right the way around the world. If this is a practical proposal that can be of use to us, of course we would take part.

    QUESTION:

    Do you expect and hope that this will be the last summit of its kind?

    PRIME MINISTER:

    I have made no secret of the fact that I would like to reform the summit, I would like more talk of trade opportunities and perhaps fewer photo opportunities. They summit is a huge gathering. There are, if I may say so, 11,000 journalists here, I am not sure that perhaps that is the best use of 11,000 journalists. Perhaps if we had smaller summits, more cohesive summits, perhaps if there were not such great expectations built up for them beforehand, if we could have the quiet, reflective and frank discussions that I think Heads of Government should have more frequently, then perhaps they would be more productive. I would hope we can move in that direction after this summit.

  • Mr Major’s Speech to the Association of American Correspondents – 30 June 1993

    Below is the text of Mr Major’s speech to the Association of American Correspondents, held at Brown’s Hotel on Wednesday 30th June 1993.

    PRIME MINISTER:

    What I want to know is, when they shoot the wounded, why do they miss so often. I was just leaving Downing Street forty five minutes or so ago and a parcel arrived. I opened it and inside was a watch and it had an inscription on the back but discretion has taught me that you don’t read out inscriptions in future.

    We’ve been talking casually over lunch and as part of the conversation, one of my visits to Kennebunkport came up. I remember going there. They were marvellous hosts, George and Barbara Bush. Extremely good company, you never knew quite what was going to happen. But they were extremely good company in every respect.

    One evening at the end of a long day, we went in a lounge there, a huge lounge and the whole of one wall converted to a large screen, a large cinema screen. And they showed a very remarkable film. Some of you may have seen it, called Patriot Games. It was a great piece of diplomacy. It’s the story of a plot to kill a British minister and I was sitting there watching it with my Private Secretary and Press Secretary. And of course the villain, the murderer, turns out to be the Private Secretary and the terrorist was a man named O’Donnell. So I said to the President that I think he scored double top on that particular occasion.

    Let me just take you back a while, just test your memory as we slip away from some of the extraneous matters that have intruded into politics over the past few months. There has been something of a frenzied atmosphere in Capitals all round the world, not just in the United Kingdom. I think, dare I say it, from time to time there has been a slightly frenzied attitude in Washington, Tokyo, in Bonn, in Paris, in Rome and perhaps in any number of other countries I might mention. But in the midst of that in the United Kingdom, some fairly important things have happened.

    If I had come here just fifteen months ago and said to you on that occasion, let me make a few predictions: I will come back and see you at the end of June in 1993. And when I come back and see you at that time, interest rates will be down at 6 per cent. Inflation will be down at 1.3 per cent and our exports will be growing faster than we’ve ever seen before and faster than anywhere else in the European Community. We’ll have the most competitive exchange rate we’ve had for a very long time. We’ll have potentially the greatest growth rate in the European Community this year. The greatest growth rate forecast for next year. Unemployment will not reach three million. And by the time I come and see you in June 1993 it will be falling for four successive months when right the way across the rest of Europe, in our principal markets, unemployment is rising, growth is falling and so many of them are heading into recession.

    Now if I had said that to you, you might perhaps have called for the men in white coats to have me carted off to the funny farm. If I’d added to that, and said in the Parliamentary Session drawing to a close in June 1993, we would have carried all our legislations, often against little local difficulties. Hugely important and reforming Bills on housing, on education, on lotteries, on asylum, on the de-nationalisation, forget that ugly word privatisation, it’s de-nationalisation of British Rail. And also, despite the occasional tiny split in my own Party, the Maastricht Bill would have gone right the way through the House of Commons and would be receiving average majorities of over 150 on the votes it faces in the House of Lords. If I’d added that, you would undoubtedly have said, this guy has taken leave of his senses.

    Yet that is the reality when you strip away the nonsense that has be-devilled so much of our national interest over recent months.

    That is the reality of what is happening.

    And then, there’s another fundamental change that has taken place.

    Out there, all the way around the United Kingdom, if you tap people on the shoulder they’ll say of me. Why does he spend so much time on foreign affairs? Why is he bothering about Europe? What about our problems here at home? But the reality for our country now, as it has been for some years, and will be in the future, is that the European market is our own home backyard in terms of exports, in terms of investment and in terms of prosperity.

    And what has happened in the last two years in Europe has been very profound, very striking.

    I believe the whole nature and tilt of European policy has begun to move. And it has begun to move in a direction that we British have been pushing for, for some time.

    Try and put it in context for a moment. For so much of the 1980’s, the European Community was bouncing along, 3 per cent plus growth a year. It’s not all that long ago in two of the European countries, Portugal and Spain, that the countries were actually led by men in dark glasses and epaulettes. And one was worrying as to whether they would actually be safe for democracy when they headed the community in the early 1980’s. And yet they are.

    Spain, despite its present difficulties, has immeasurably improved its position over the last decade and so has Portugal.

    We have now seen in the last couple of years some changes in European policy profoundly important for Europe and profoundly important for this country.

    The first of them is the enlargement of the community. The Community has now agreed, the British have pushed it and pushed and pushed it and the Community has accepted, that the four EFTAN countries can enter the community, subject to negotiations being satisfactory, by 1 January 1995. A good deal earlier than many people anticipated. Many would have pushed it aside for their own domestic reasons. We have won that argument, they are coming in, subject to their own domestic approvals, they’ll be in the community by 1 January 1995.

    Four extra countries enlarging the community from twelve to sixteen and all of them net contributors to the community budget.

    For the first time ever in the European Communities history, about one half of all the member states will be net contributors to the budget, not net beneficiaries from the large contributions of the Germans, the British and the French.

    And that begins to change the tilt and balance of interests in the community in a more sensible and pragmatic way in terms of looking at its own financial future.

    And then of course there is the remarkable change. The new realism that I think was very evident in the debates we had in Copenhagen. Alas, in this country rather overshadowed by domestic matters. The debates there were at Copenhagen were about the future direction of European economic policy.

    I make no secret of the fact, that I believe we have to look ahead for a decade or more and address a problem that has been getting steadily worse right the way across Europe.

    Unemployment is a huge problem. We all know it. There’s been a huge hump in unemployment right the way across the community in the last two or three years. Seventeen million Europeans unemployed. In two years time it is likely to be twenty million Europeans unemployed.

    But that isn’t just a function of this current recession. Unemployment in Europe has been rising steadily, growth or not, for over twenty years. And it has been rising steadily for twenty years because Europe has become relatively less competitive over twenty years to the United States, Japan and of course to the Pacific Basin. Though I think separate criteria apply there.

    I won’t weary you with lots of statistics. Just let me give you one that is a start. Over twenty years the growth in Europe and the growth in the United States is pretty much the same. It should have produced the same number of jobs. But in fact for every single job created in Europe over twenty years, the United States have created four. I think the underlying reason they have done that is the flexibility of the United States’ economy and a lack of additional on-costs that has be-devilled the cost structure of so much of employment in Europe.

    So it isn’t a question of just being beastly and holding back on social costs, it is fundamental to the prosperity of the future of Europe, that the whole of Europe, not just the United Kingdom, grasps that nettle of competitiveness for the future. If they don’t, they will remain powerful and relatively rich. But relatively, over time, they will become less powerful, less influential and less wealthy. Unless across Europe they have the courage to actually address those problems.

    And it is for that I have been arguing in the European Community over recent years. And it is for that I will go on arguing.

    The other point, I think that has changed, very much in the direction we have wanted it to, is the size and shape of the Community, even beyond the growth of the EFTAN states.

    I see the European Community at the moment as, in truth, just a fragment of European community. It doesn’t yet take in our old friends in Central and Eastern Europe. Hungary, Czechlands, Slovak, in due course Romania, Bulgaria, Poland. In due course they must come into the community.

    In the last two years the British have managed to persuade our European partners that will happen. It won’t happen perhaps for a decade, but it is now agreed as a matter of European policy that in due course they will enter the Community. And for military, social and political reasons, I believe that is the right way ahead for the community to go.

    Let me move on to one or two other issues and skim over them just lightly so that I may leave the maximum amount of time for you to ask the questions you wish to ask rather than simply listen to what I wish to say.

    I think the United States were right to attack Baghdad. What I said publicly is what I believe privately. I have not a shred of reservation about it. The attempt to assassinate, in the way that occurred, a former President of the United States with the potential death of hundreds of other innocent people, who would just have been in that area, is an act of international terrorism. An act of international terrorism sponsored not by a group of international terrorists but by the Government of Iraq and by the dictator of Iraq.

    Faced with that I think the United States were absolutely right to retaliate and to attack in the way that they did. And they certainly have my wholehearted support. And I regret that support doesn’t spread, as it deserves to, across every strand of British politics.

    Let me just say a word about the G7 Summit that’s just coming up. There are a number of important issues that I think we have to address at the G7 Summit. Certainly I think we find it in our interests, as well as in Russia’s interests, to try and help the Russians as they go through the second Russian revolution this century. I wonder at the right way to do it.

    There is more than one way to do it and in many ways I think the most effective way is a wide-range of micro-economic assistance rather than macro-economic packages with no clear guidance as to what it will be used for or over what timescale it will be available.

    If one goes these days to Moscow and compares it to two years ago, you are beginning to see embedded in the system, the roots of private enterprise. Whereas there was once just a black market, there are now lots of little stalls selling goods that they’ve brought in from overseas. Things that simply wouldn’t have been available in Russia just two years ago are now available.

    Go into the stores where you wouldn’t have brought anything a few years ago, except perhaps as an illustration of how rotten everything they had was. You now find a wide range of, in many cases, quite high quality goods.

    There is a buzz, a feel, a moving place. Despite all the difficulties they have, it suggests that there is a realistic chance, and it will take a long time, it will take a long time, but a realistic chance that their hopes and aspirations to move to a mixed market economy may be beginning to take shallow root in Russia. And it is in our interests I think, on every count, to try and assist them.

    Then of course I think we must look at the desirability of settlement of the Uruguay Round. For some years, Heads of Government have gone to the G7. They have solemnly sat down and agreed at the end of that year they would have a GATT settlement. And the next year they have gone back and agreed that at the end of that year they would have a GATT settlement. It is beginning, frankly, to get a bit thin and I know the difficulties there will be only too well.

    Few have been in a better position to see what the difficulties are. But I do believe it is profoundly important that we begin to make progress with that agreement.

    If we find ourselves in a stand-off between any of the great trading nations to the extent that you then get protectionism and counter-protectionism and trade wars, there will be no winning for anyone. That will be a defeat for everyone and at this moment, when the thing the world economy most needs is confidence and the growth of trade, it would be folly for us not to bend every wit and will we have to try and find a settlement to the Uruguay Round.

    Maybe positions will have to be changed, people will have to take a long-term view and in many cases face difficulties in their own countries. But I think we need to address that very seriously and see what can be done.

    The other thing I just briefly want to touch on is the world economy. It is pretty sluggish. Indeed, in Europe, the United Kingdom is coming out of recession. Many of our European partners are going into recession. In some cases on a far greater scale than they could remember at any stage in the postwar period.

    If you look at Japan, the signals are conflicting. In Japan the Japanese economy is certainly not bounding along as one of the great entrants to the world economy in the way it has so often in the past.

    The United States looked as though it was coming sharply and clearly and powerfully out of recession a few months ago. It looks a good deal less like that now. And so one has, amongst three of the great engines of the world economy, the United States, Japan and Germany, none of them exactly giving that powerful pull out of sluggishness and recession that ideally we would wish to see to get trade going and see growth return to put more and more people back to work.

    So I think there are areas there. I don’t anticipate that we can sit round at the table in Tokyo and decide a new world economic order that is going to correct us. Nobody should imagine that is remotely going to happen. But I think we do have to look and see what the policies in different countries, that will lead to sustainable non-inflationary growth, that will, during the 1990’s, the most competitive decade we will ever have lived through, which ever part of the world we’re in, to see what is the best way to lift the economy up and out and back towards prosperity.

    Those are some of the things that I think we will be discussing, by no means an exclusive agenda, at the G7 in Tokyo.

    There are many other issues I could stray into. Many of them are lengthy and I think dealing with them trivially would perhaps be a mistake. What I will do, with your consent, is just leave it at that and answer any questions you may have either on the subjects I have raised or if you wish on any other subjects.

     

    QUESTIONS AND ANSWERS

    QUESTION (Tom Penther, CBS News):

    Prime Minister, if I could ask a broader question. As the United States withdraws from Europe and seems to be advocating its boardroom leadership, Bosnia is the obvious example. Who or what in Europe is going to build this back?

    PRIME MINISTER:

    Well, there are two premises there. If I may examine them both.

    That the United States militarily is reducing its commitment to Europe. I think that’s probably right. Given the changed military and security structure in Europe, there isn’t the same land based threat that there once was from the Soviet Union. We haven’t got Russian troops on the very borders of West Germany anymore. They are right the other side of Russia and they’ve got an army that’s collapsing, and in the most appalling difficulties. The threat has wholly changed. But there will still be a very substantial United States presence in Europe. I would guess around 100,000 troops will remain. And I know of no suggestion that this administration or any alternative administration has any imminent likelihood of reducing below that 100,000.

    So it is a reduction in their physical presence in Europe. But I don’t believe it is an abdication of their instinctive and traditional role as part of European defence. I don’t believe that is the case, though you perhaps may feel you know your own fellow citizens better than I do but I don’t believe it is.

    As to America’s world role. The United States finds itself in a difficult position at the moment. Difficult in the sense that it is now the only superpower.

    When the United States had the old Soviet Union, there was a counter balance. People instinctively rallied to it, or they rallied against it. Now the counter balance is gone and in a curious way it leaves the United States much more exposed. It hasn’t got an enemy, I’ll put the word in inverted commas if I may, that it can push against in difficult times. It has actually got to exist in popular fact, solely upon its own policies without that limited aspect that so often helps Governments when they face difficulties.

    The present administration has got two problems on its plate. Neither of them of its own making, both of them hellishly difficult to deal with. Bosnia is quite literally a problem from hell and it is difficult to see quite what the United States could do to provide effective leadership.

    As far as the world economy is concerned, economies take a long time to respond to action. This one showed signs of being very powerful and has now fallen away. And it will take time for the administration to begin to put that right.

    I think that is an extraordinarily unfortunate conjunction of events for a new President to inherit. And I hope and believe that America will grapple with those immediate difficulties that it has. For I profoundly believe that it is very much in the interests of the free world, of the West in particular, that America, as the single great superpower, does exert a powerful leadership in the western world. I hope and expect that it will do so. I don’t believe there is any information to abdicate that role and I profoundly hope that there isn’t.

    QUESTION (Keith Brockwell, Journal of Commerce):

    Prime Minister, you mentioned the importance of getting an agreement in the Uruguay Round at the G7. When you arrive in Tokyo you will find there is no Japanese Government, the French have a pretty large chip on their shoulder and most of the other leaders that are there are looking at opinion polls that frankly they must consider to be pretty grim. How can these leaders summon the political will to make difficult choices, to change positions as you said, in very strategically, or in politically sensitive sectors that are needed to make to make a deal? And if this year after the last four years, the leaders are unable to do so, do you believe that the momentum can possibly be summoned to have another go?

    PRIME MINISTER:

    I think the answer to the first part of the question is, look at what will happen if they don’t. I don’t expect that these matters are going to be easily solved and I’m certainly not saying they must be solved at Tokyo next week. Things rarely operate in that fashion. We must make sure the momentum goes on up to Tokyo, during Tokyo and through Tokyo. But nobody can expect that if they aren’t all solved at Tokyo, as I suspect they will not be, that is the end of the matter. We just have to continue.

    But despite the difficulties that you’ve set out more vividly than I might have done in public, the reality is that unless the leaders of those seven large industrial nations actually move towards a GATT agreement, there will not be one. And if there is not one, what lies the other side of that hill is potentially immensely damaging. And the closer one gets to those difficulties, the greater one sees the prize already there in those areas of GATT already agreed. The loss in losing that and the potential damage that could then come about if the whole Uruguay Round itself was not able to move forward.

    It was put very vividly to me the, the moral case for an agreement, by the President of one of the [inaudible] group countries, who came to see me, a relatively small country, and said: “what are you Americans and you Europeans playing at. We reached our agreements in the GATT round five years ago. The world has changed since then. We haven’t squealed and complained. We’ve stuck with it because we want a GATT agreement, we’re a relatively small nation. A few months ago the Americans and the Europeans struck a deal and now they’re both wondering whether they’re going to stick to it. Where does that put us when we have already stuck to the deal that we made four or five years ago?”

    Now I have to say to you that I have a lot of sympathy with that argument. And it isn’t just a question of the position of America and the position of Europe.

    A GATT deal is of acute importance to countries all the way round the world. There is no morality in saying to many of the small nations of the world, we Americans, we British, we French and we Germans are going to be frightfully generous with all this overseas aid. And while we’re giving you this overseas aid, a good deal of it tied to trade, we will actually close off our markets to your goods. So you can live off this overseas aid, today, tomorrow and for as far ahead as you can see.

    I believe that is a self defeating policy. At some stage we have got to liberate world trade, open markets and enable these smaller countries themselves to provide themselves by their own endeavours and not have a hand to mouth existence with aid from the rich countries in the West.

    And unless we do that, we will simply find that the rich countries of the West, over time, will not be rich enough to help these other nations.

    So although this argument is largely couched in economic terms, I have to say personally, I think there is a powerful moral case. If that is not a dangerous thing for a politician to say in public these days. There is a powerful moral case for a settlement of the GATT round in the interest of weak nations in Latin America, in Africa, in South East Asia and in many other parts of the globe and I think that is an argument that will need to surface at Tokyo and elsewhere in terms of discussion on the GATT round.

    QUESTION (Carla Rappaport, Fortune Magazine):

    I was very interested in your comments on employment. You praised America’s labour flexibility. The UK actually has one of the most flexible labour systems in Europe. Yet when I talk to economists about the recent [inaudible]. What more does Britain have to do, what is left to help the unemployment problem?

    PRIME MINISTER:

    I think there are a number of things that need doing. I certainly think there are some more supply side changes that we could make to free up unemployment.

    I think as a whole, the economy is too heavily over-regulated. That largely, politicians push that out and they say well that’s wicked Brussels sending lots of nasty directives over here. Up to a point that’s true. They do send lots of nasty directives over here. But on top of that we often tie a cap and bells to them when they get to Whitehall.

    We have some accident, and then there will be an inquiry, and then whoever conducts the inquiry makes 480 recommendations as to what might be done to ensure that such a thing never occurs again. They are faithfully enacted.

    If one asks a businessman, go out there and ask all the people running small and medium sized companies what inhibits them from growth, one of the things they will come back, almost invariably, and say to you is, the degree of regulation is too great.

    It is in this country less than in other European countries, but that is not the right measure. The question is, how does it compare with the United States and with Japan. That is the question. And the answer to that question is very badly. So I think there is a good deal more of supply side changes that still need to be carried through.

    I think the trade union changes have worked immensely successively and I think that is very good. But there are other changes. I think there is a good degree of deregulation. Like every other nation in Europe we have to look at our social on costs.

    We in the United Kingdom have seen a social budget that has absolutely soared and people rather say, well that’s unimportant. Up to a point, but only up to a point. If you strip all the unemployment costs out of our social budget and then look at the rest of our social security budget, I’ve put health to one side, just social security, social security rises year on year, almost inexorably by between three and three and a half per cent a year over and above the rate of inflation.

    Now that is the equivalent each year of about a penny ha’penny on income tax.

    Now that is happening, it’s happening all over Europe, in Germany, in Holland and Italy. All sorts of countries that are politically attracted to high social provision are finding it is necessary to trim back within what they can afford. And that is true here. That is why we have set in train with these fundamental expenditure reviews that we need to examine. So I think some of those are the things that we still need to do.

    There’s one other that I would touch upon. One of the other clear pieces of evidence from examining unemployment across Europe, is to look at the people who are unemployed. And predominantly the people who are unemployed for a long time are relatively unskilled males. They are the people who are unemployed for a long time. I’m not now talking just of the United Kingdom, I’m talking right the way across western Europe. And that argues to me firstly the on-cost argument. The same on-costs on someone of less economic value to a company, means they’re less likely to be employed. Straight economic facts. So one has to look at those on-costs.

    Secondly it argues that all across Europe we need to look more carefully at the nature and style of trading.

    Thirdly in terms of the United Kingdom it argues very powerfully to me that I very much want to expand both the service sector, where most of our future jobs will come, but also the manufacturing sector. Not because I think the manufacturing sector of itself will be a large net producer of additional jobs, I doubt that it will. But I think the suppliers of some of the secondary impact of the wider manufacturing sector will give us jobs. And a wider manufacturing sector of its own will be benevolent addition to the British economy. So those are some of the things I think will go to address the point you made.

    QUESTION (Rick Salinger, CNN):

    You mentioned Bosnia as a problem from hell, perhaps a case can be made for saying that Northern Ireland’s is the Prime Minister’s problem from hell. Are you discouraged by the lack of success in bringing about a political solution and an end to the terrorism there?

    PRIME MINISTER:

    Well, I’d like to have had a complete solution of course. But I think it would be unwise to look at the extent to which progress has been made in the last two or three years. Let me illustrate that with some practical points rather than just the assertion.

    Who would have contemplated two or three years ago that we would have managed to get all the political parties talking in the way that they have around the table. It has never happened before. Large measures of agreement reached in strand 1 and strand 2 of the talks. Agreement, without an explosion in either side of the Ireland, that there should be regular bilateral summits between the Irish Government and the British Government. Huge improvement in cooperation on security matters between the Irish Government and the British Government. Huge increase in the relationship between the Garda and the Royal Ulster Constabulary.

    And perhaps above all, if you go to Northern Ireland and go out on the streets and talk to the people of Northern Ireland, there is a huge instinctive will for the politicians to talk and to try and reach an agreement.

    They don’t say anymore this or that political slogan when you talk to them. What they do say, though they may not put it quite in these terms, is that they don’t want another twenty three years like the last twenty three years. They do want us to push ahead for some progress and the reason for that is quite clear.

    If you walk around Belfast it’s a different city from ten years ago. The difficulties are highly publicised, magnified all the way round the world. The successes aren’t. There has been a huge amount of investment in Belfast and a great change in the city. One only has to go there to see it.

    But it is just a drop in the ocean and this is what explains the public attitude. Just a drop in the ocean to what could happen if the bloodshed and the terrorism stopped.

    You could triple tourism. I was in Northern Ireland over the weekend. The first Prime Minister to spend a weekend there I think for fifty years. I opened the tourist agency in Larne, a brand new agency. They could triple tourism in Northern Ireland but for the fact that all the rest of the world knows about Northern Ireland is when you get terrorist incidents. So they don’t go. They think it is far worse than it is.

    And secondly inward investment. Northern Ireland is a hugely attractive place to invest in. I went, the previous time I was there, to a great cotton factory where they got some investment from the United States. They’d merged and they were producing Fruit of the Loom t-shirts. Everybody there was hugely successful. Much more competitive than anywhere in the Pacific Basin.

    And the amount of inward investment that would flood into Northern Ireland because of the attraction of Northern Ireland as a place to live, and also its competitiveness is huge, provided it had a better terrorist overhang.

    Now the people of Northern Ireland know that. They know that there is a prosperity deficit in Northern Ireland because of terrorism. And I think they are getting heartily sick of it.

    So I think there is quite an agenda of reasons for positive hope. I don’t think it will be easy, I don’t think it will necessarily be quick but I think inexorably we are moving in the right direction in Northern Ireland and that is something one could not have said for much of the last quarter of a century.

    QUESTION (Linda Albany, ABC News):

    Recently someone quite close to the talks on Bosnia indicated that they were quite surprised by the lack of preparation which the Americans came overseas to talk about what it was they wanted done, and said something about this administration being worse than even the Carter administration [inaudible]. What was the reaction of Europeans, would you say, behind closed doors to some extent, to what the US’s position was and how they handled it?

    PRIME MINISTER:

    I’m always rather suspicious of anonymous quotes, having spent a year living through them. So I tend not to react too well to anonymous quotes.

    I can only say on the occasions that I have spoken either to President Clinton or the Secretary of State, I found immensely well briefed about realities. Nobody is in any doubt that we have produced different prescriptions as to what is appropriate from time to time. But I think they’re very well briefed. I think they do understand the problems involved and I sometimes find it bizarre when I read afterwards what has allegedly happened at a meeting I attended. Either I wasn’t there at all or there’s been some misapprehension in the way it has subsequently been passed on for reporting. So I have no criticisms to make on that score.

    It’s a very difficult problem. The United States have to grapple with it in the same way that we do. In some areas we have reached different conclusions but I think the objectives we have in mind are the same objectives and I think that will become apparent again when we talk about it in weeks ahead.

    QUESTION (Maureen Johnson, Associated Press):

    Prime Minister, when you were saying fifteen months ago we wouldn’t have believed the achievements of your administration if you’d listed them, would you yourself have believed one of us if we had said where you’re poll ratings would be now and how candid or permanent do you think these are?

    PRIME MINISTER:

    I have someone whose word you trust implicitly with me. Namely Gus O’Donnell. And Gus will tell you, if I ask him to, won’t you Gus. “Yes Prime Minister” [GUS]. He used to write a very famous show as well of the same title.

    What I said to him the day after the last election. On the Friday after the election he sat upstairs in my flat. There were four of us there: Chris Patten, Gus O’Donnell, Sara Hogg and myself. And one of them said, ‘well, election’s over, we’ve won it’. And I said, and I hope Gus will recall the incident, that in a year I would be the most unpopular Prime Minister that this country had known for a very long time.

    I did not quite envisage how it would come about. I freely confess that. But I was well aware of the intrinsic difficulties that lay ahead and I had no doubt that it would lead to a considerable amount of difficulties.

    But I’m bound to say, asking me about poll ratings is not wildly productive. If I had believed poll ratings I wouldn’t have had any of these problems, because I wouldn’t have won the last election. None of them said that we would, I didn’t believe them then. I disregarded them then and I have no intention of letting them get in the way of what I’m doing now.

    QUESTION:

    [Inaudible].

    PRIME MINISTER:

    The Exchange Rate’s only part of competitiveness. Don’t make too much just of the Exchange Rate. That’s short hand for a range of other things as well.

    If you look, for example, at the other components of competitiveness in the United Kingdom: unit costs, productivity growth. You’ll see all of them are now strikingly better than most of our European competitors and strikingly better than we’ve seen previously in this country. So I wouldn’t make too much simply of the Exchange Rate problem.

    There are a whole range of other things that are making our exports very competitive. And I am delighted about that and also delighted that we have quite a degree of spare capacity, with proved production in this country in order to continue to export.

    The problem that we will face, I think, will be a slightly different one. The problem that we are going to face over the next year is that so many of our principal markets are themselves in recession or are heading towards recession. So we are likely to get a larger share of our improved competitiveness. A larger share but perhaps of a smaller market. And if I had to worry about the trade deficit, I would worry about that aspect of the trade deficit rather than the one that you raised.

    QUESTION:

    [Inaudible].

    PRIME MINISTER:

    Well, I think that question is capable of more than one interpretation. I hope we will be able to reach a settlement that is satisfactory for each of the three parties.

    Even if that were true, the probability is, I state this is a probability not a certainty, but the probability is that there will need to be some international presence in the former Yugoslavia for some time to come. I don’t know what form that presence will take. I don’t know what form any guarantees that might be required would be. But I would be very surprised if there wasn’t firstly an humanitarian presence in Bosnia for some time.

    Secondly a presence aimed at the reconstruction of the former Yugoslavia, and very possibly what I might call the guardian presence, that’s small g, of troops under a UN guise to help in one form or another.

    So I think if any of the world’s big nations had ambitions that they may be able to wash their hands of the Yugoslavian/Bosnian problem in the near future, then I think that is very unlikely. I don’t myself foresee it. I hope we will get a settlement. I think that would be a great step forward.

    The other problems would be rather more agreeable to have. But even if that occurred and we did get a settlement and that settlement were satisfactory and it looked as though it was going to last, there would still be a need, I think, for a continuing involvement.

    QUESTION:

    Prime Minister, for thirty five years I’ve been trying, to explain British cricket. Unsuccessfully of course. Now I have to explain whether there is actually a decline in British cricket in its appearance of British Cricket and County Cricket, a lot of my audiences are waiting expectantly for my answer.

    PRIME MINISTER:

    I have many responsibilities and I am prepared to take the blame for most of them which on balance is a jolly good thing. Let me try and respond to that question.

    As for explaining cricket it is quite simple. Two men go out to the middle of the field, they put in six pieces of wood, two men in white coats come out and it starts to rain. That is really all you need to know.

    I tried to explain to President Bush what a leg breaker was, several times, and he got it. Ah, he said, it’s a curved ball that doesn’t bounce.

    There is a serious point underlying your question. And I think it deserves a slightly more serious answer. County Cricket isn’t the force it was. School cricket, the lack of school cricket, is really I think where the roots of the difficulties cricketers have actually spring from.

    That is the negative side of the equation. The positive side of the equation is that the great County sides have recognised that and they are now organising on a scale we’ve never seen before in this country. Club Cricket and Youth Cricket actually organised by Lancashire, Surrey, Yorkshire and Middlesex. So they are seeking to get youngsters with some form of cricketing talent at a very young age and exposing them to a higher class of cricket.

    That will take some time to work its way through. But if you look at the Surrey team, which I mention only because by far the most important public appointment I hold is that of life vice-president of Surrey County Cricket. A large number of the present Surrey County side actually came through those youth arrangements.