SEGRE- THE WHITE HOUSE WASH NGTON 7923 MEMORANDUM CF CONVERSATION u SUBJECT Meeting with of Ja % PARTICIPANTS The President James A Baker III Secretary of State Brent Scowcroft Assistant to the President for National Security Affairs Richard Solomon Assistant Secretary of State for East Asian and Pacific Affairs Nancy Bearg Dyke NSC Staff Notetaker Frances Seeds Interpreter Toshiki Kaifu Prime Minister Taro Nakayama Minister of Foreign Affairs Ambassador Owada Mr Matsuura Mr Oshima Mr Okamoto Koji Tsuruota Interpreter September 29 1990 7 00 - 8 05 p m Waldorf Astoria Hotel New York City DATE TIME AND PL r CE Welcome and I am very pleased to see you at this critically important time I am grateful for the many consultations you and I have had personally and the work done by our finance and foreign ministers From my standpoint I want to say thanks for coming here I apologize for the New York traffic tie ups JZ I will continue to speak out publicly in the US saying the US and Japan are side-by-side in the UN and bilaterally in response to aggression am very pleased with Japan's response I have only four subjects to raise but I want to turn the floor over to you and again welcome ¢ Thank you First I want to say how happy I have already conveyed to yo with letters and phone calls how I feel in this crisis I want to reiterate that I admire your leadership your courage and your promptly acting to deploy forces together with the Arabs for a I am to see you again 0eclassify on DECLASSIFIED PER E O 12958 AS AMENDED OADR 2a c -MZ- 'l-F - 0 2 multilateral force and in the United Nations that has kept Saddam Hussein from taking further action -81 As we were looking forward to a major trend in history -- from US and Soviet opposition to one of dialogue -- we cannot overlook aggression Japan is committed to full implementation of the UN resolutions and I have been exerting all of my efforts to this er Fire alarm sounded A rnbassador Joseph Reed came in and assured us it was false P r I have acted on the basis of this understanding together with my cabinet to come up with contributions especially for Egypt Jordan and Turkey $2 billion worth of aid In addition we have contributed $22 million to relieving refugee problems but most important is not the money As I told you in the beginning I would do the most I could to come up with assistance In kind we are providing medical assistance and others types of assistance are now gradually coming to reality I think we have discussed over the phone that there are many ways to deal with this crisis with economic sanctions to get them as effective as can be I look forward to your continuing strong leadership $ S1 We fully understand the constitutional constraints of Japan and I understand you have constructed ways for the Japan Self Defense Forces to participate in the forces Anything like that would be very useful and quite well received around the world You mentioned Gulf support I urge it not be delayed Come as fast as possible You may have Diet problems but I encourage it not to lay over until next year The recipients need it as soon as possible J 81 On a different subject you have been mosc generous in terms of Host Nation Support but if it could be increased in 1991 it would send a good signal to our country I readily concede Japan has been most generous n sustaining our forces and more so than others j e1 Two other subjects One is always contentious - agriculture and the Uruguay Round Again we are always dealing with problems in Congress and you tell me about problems in your Diec I know this is complicated for you at home A successful conclusion of the Uruguay Round will mean a half trillion dollars increase in world trade -- fast You remember our discussion in Houston with the EC on this question I'm soliciting support up here with countries such as Poland and other European countries to work for a successful conclusion of the Uruguay Round So I would just make the appeal and ask you to share with your cabinet and '8E6RET -8EGRET 3 Diet that we a e trying to get as much openness on the trade side as possible y9-1 The other subject Toshiki was the Strategic Petroleum Reserve SPR These speculators largely in Chicago and elsewhere are driving oil prices up on a purely speculative basis And I'm sure there is concern about that in Japan as well as here Our assessment is that there is not a shortage of oil going to market but there may be in the fourth quarter this year So it might be that we should join together to draw down some from the SPR to counteract the market and relieve some of the shortage in the fourth quarter We have been a little divided whether to call you about drawing down our own We are not in that mode now But we will make a test drawdown of our own J J Our Energy Department is urging a significant drawdown and to urge Japan and Germany to join in But others are a little more cautious about that approach right now I would like to urge that we stay in close touch on it and act in concert as much as possible It would send a signal to speculators I have not raised this with Chancellor Kohl yet but I wanted you to know now that we are thinking about it yf On the first question as I said we are contemplating discussing among ourselves what Japan can do we are looking into a world that is changing and the US is leading the world that will be centered around the United Nations I am supporting a law we call UN Peace Cooperation Law The Cooperation Corps which will be dispatched under this law will include everyone from Japan being dispatched It is a completely new concept It will enable Japan not to just send money but also personnel We will be sweating with you too ft The Japanese people in the last 45 years have been used to peace provided by you The Japanese are of the understanding that at the time of World War II Japan caused severe trouble throughout the world and decided not to be involved in any activities of force That is the framework of the constitution you refer to George and it is true that the stability of Japan has contributed to stability in Asia Therefore the framework under which we are now considering the bill is to include cooperation but not combat and limiting ourselves to non-military activities I stated these points just prior to departing Japan in a press conference but further discussion will be necessary in Japan as we present the bill to the Diet Public opinion will have a role I wanted to impress upon the Japanese people the need to assist j T What was the reaction --SEGREf· Favorable 0 4 P I invited only the party leaders The largest opposition party was strongly opposed The second largest opposition party put strong restrictions on JSDF and they prefer not to dispatch at all This is against the background of Japan never in the past engaging in such an exercise There will be much more time and many more arguments to be done before we engage in it but I intend to do it J 21' When we will have more details of the bill I will have Ambassador Murata inform you or someone in your Administration Since we are still writing it I am not in a position right now to tell you all the contents Second on the contribution Right after I announced the major pi ars of our contribution I made public the $1 billion figure That was what we could make immediately available this fiscal year When Secretary Brady came he informed me that more funds will be needed in the long run So I said an additional $1 billion but it is not in the current FY reserve fund I am consulting with the Finance Minister how to back up this pledge 1 87 We of course will try to come up with additional funds in the current budget but will not produce enough So I intend to call an Extraordinary Session Diet to come up with the funds Of the $2 billion pledged we will take measures to make $600 million available this year and the rest maybe through IMF not directly by our budget We will discuss it The first $1 billion which we hoped would primarily go to the US was intended originally to be given to the UN but the UN declined Therefore we had to go to the GCC and through negotiations we were able to set up the Gulf Fund for Peace Sl billion is there already and in kind to the US and payments to the aircraft charters have already been made The $22 million contribution to refugees is being used to dispatch aircraft to Jordan and carry refugees home And the medical team went first to Saudi Arabia then to Jordan to see if there are any medical ·needs they can meet On the Uruguay Round as I stated at the Houston Summit Japan's position is to have the Uruguay Round succeed I have given instructions in this regard to my cabinet ministers According to reports I have received from my Agriculture Minister on September 28 Japan submitted to GATT the offer of a list on products I understand countries have problems but I instructed my ministers to make offers to co e to agreeme t I hope by the first part of December we will be able to arrive at a successful agreement J -SECRET 5 On Host Nation Support we have been making efforts on our own on the understanding that the US-Japan security arrangement is of utmost importance So we have been making a major effort Now in the Japanese Government we are considering the next midterm defense plan and we are considering Host Nation Support And I would state to you that as a matter of course we will make our best efforts for you for the US On Host Nation Support as we were considering contributions in the Middle East some said HNS should be included as a oillar in our Persian Gulf helo Others said No it is a matte of course and should not be art of our contribution to the Middle East crisis This latter view prevailed Please don't misconstrue just because we have not mentioned this during the crisis They are separate -81 Yes they are separate R Since we are seeing oil prices rise we need a serious response for Japan We are now thinking if we indicate we will use the reserves we invite panic So we would rather tell people they need to conserve Japan had 220 000 barrels a day of oil from Iraq and Kuwait and they are gone and the price is rising and we need to accept it If the volume of oil in Japan goes down we need to do something but right now the Japanese Government position is to tell people they need to live with the price hikes and not touch the reserves yt I just stated in a very simple and frank way our position Since the whole world is undergoing change crisis we may need to consider this urther and please contact e or us 9' I will It is hard to know what is the right thing to do Let's stay in close touch on this The International Energy Agency will be discussing it soon - in the next few days 9 P Please feel free to consult me on this issue when we need to cooperate and I'll do as uch as I can y'5 I would like to take this opportunity to inform you about Korea A team headed by Kanamaru and including Hanabe visited North Korea Prior to my departure I had said as leader of the LDP I apologize for our past history in Korea But since we have no relationship with North Korea I said I couldn't say anything as Prime Minister The visit is still not fully reported to me but things are moving I know that North Korea still does not accept the IAEA safeguards But also we need the ROK involved and informed I called President Roh and said I intend to keep him armed I hope to come to a balanced resolution in the end 8EGRE t - 66% J 6 What is the latest with the Soviets cJZf 'nister Kai Soviet Foreign Minister Shevardnadze came to Japan and I held talks with him During the visit we agreed that Gorbachev would visit Japan in April We have the territorial question to be resolved The Northern Territories remain an issue from World War II and we intend to resolve it with a peace treaty I hope Gorbachev's visit is a turning point Gp until then a Soviet economic team may come to learn about the Japanese economy and we may have a technical assistance team But as we go into this we cannot set aside the Northern Territories issue yin No y We feel they may be thinking about putting the Northern Territories issue off for the next ten years I'm concerned so I told the Soviet Ambassador we are looking for stability of the Soviet-Japanese relationship So we support perestroika I have made these points to them I look for your continued support George y ' Yes we will continue to support you and I hope they will accommodate you on this longstanding issue ' J I would again like to reiterate that we are interested in free democracy and market economies becoming the governing rules of the world and we ought to get rid of Saddam Hussein as soon as possible Y I would like invite you and Barbara to make a State Visit in the spring SJl esident Sounds great I accept before you change your mind Bar will be happy We will have to work out the dates It is important for the US and Japan and for other reasons yl'f -- End of Conversation --