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[This is a translation of the Japanese minutes of the press conference. The original statements were made in Japanese and Czech. As such, the phrasing of the statements made in Czech may differ slightly from the original.]
1. Opening Remarks by Prime Minister Mirek Topolanek
I am happy to welcome the visit by Prime Minister Aso. I am delighted that we have been able to hold bilateral talks during this visit, in addition to the Eighteenth Japan-European Union Annual Summit Meeting [to be held on 4 May]. At the G20 Summit held in London, we discussed the global economic crisis, and this is a topic that we also discussed today. There are currently 247 Japanese companies operating in the Czech Republic, of which 150 are in the services industry, 88 in manufacturing, and three in the field of research and development. There is an imbalance in bilateral trade, with exports from Japan exceeding exports from the Czech Republic by a significant amount. There are four reasons for this. The first is that the level [of product quality] of Czech companies tends to be low, making it difficult for them to enter the Japanese market where high quality is demanded. The second pertains to the exchange rate between the Czech Republic and Japan. The third element has to do with non-tariff barriers which cannot be removed. And the fourth is a problem of subcontractors in third countries. We discussed each of these problems.
Our two countries recently reached agreement on [the purchase of] 40 million tons in assigned amount units (carbon credits), and I would like to see further advances in technical areas. For us, the environmental issue is not a crisis but a business opportunity.
I look forward to discussing the issues of North Korea, Afghanistan, and China during our dinner meeting.
2. Opening Remarks by Prime Minister Taro Aso
I have just held a very profitable meeting with Prime Minister Mirek Topolanek. I paid tribute to the strong leadership being exercised by the Czech Republic as the EU Presidency. We reaffirmed that our two countries would advance wide-ranging cooperation on both a bilateral basis and within the context of Japan-EU relations.
One concrete achievement of our meeting was in the economic domain. I indicated that there are many Japanese companies that continue to operate in the Czech Republic despite the current economic crisis and that these companies have created approximately 40,000 jobs. I believe this is good news for both countries.
I also expressed the hope that the 100 billion dollars of loans from Japan to the International Monetary Fund would help the region of Central and Eastern Europe recover from the crisis. I also said that I expected the social security agreement between Japan and the Czech Republic that is due to enter into effect shortly will further enhance bilateral economic relations.
The second achievement is in the field of science and technology exchanges. We reaffirmed that bilateral exchanges in the field of science and technology would be promoted further, building on the achievements of the symposium "Japan-Czech Republic Science Day" which has been held four times thus far.
Thirdly, we agreed to promote dialogue and cooperation among Japan and the Visegrad Four which consists of the Czech Republic, Hungary, Slovakia and Poland. This framework of "V4+1 cooperation" was launched when I served as Foreign Minister. We shall proceed with arrangements to hold a meeting among the foreign ministers of the V4+1 during the Asia-Europe Foreign Ministers' Meeting to be held later this month in Hanoi.
We also confirmed that we would cooperate closely on such issues as those relating to North Korea, [pandemic influenza] and climate change. Regarding climate change, I hope that Japan's leading technologies in energy-saving and environmental conservation would be utilised in the Czech Republic.
3. Q&As
QUESTION: I would like to ask both leaders about North Korea. North Korea has become increasingly defiant, such as by announcing it would not participate any more in the Six-Party Talks. How do both of you regard this development, and how will your countries deal with this issue from now on?
PRIME MINISTER MIREK TOPOLANEK: We certainly share the same thinking with Japan about North Korea. In terms of physical proximity, the threat of North Korea's nuclear development poses a deeper threat to Japan [than to the Czech Republic]. We are paying close attention to whether North Korea fulfils its international commitments, and the EU side strongly expressed its concerns about the current state of the Six-Party Talks at the EU-North Korea meeting held in Pyongyang on 23 March. The day that North Korea launched a missile recently coincided with US President Barack Obama's visit to the Czech Republic, and so we issued a joint statement with the United States. For Japan's part, the North Korean issue should, I believe, also be considered as a bilateral issue. The abduction of Japanese nationals and the settlement of so-called issues related to the past have yet to be achieved. In conclusion, North Korea's weapons programme is a threat to the whole world.
PRIME MINISTER ASO: To resolve the North Korean issue, it is important for the international community to respond in unity. We appreciate the common approach with us which the Czech Republic and other EU member states have consistently taken on the nuclear issue, the missile issue, as well as on human rights issue, including the abduction issue. When the recent missile launch took place, I understand that the Czech Republic, as the EU Presidency, strove to coordinate within the EU, and this enabled a prompt response. I am very grateful for these efforts. I reiterate my call upon North Korea to take the Presidential Statement recently issued by the United Nations Security Council seriously, to conform to the Security Council's resolutions and to refrain from actions which undermine the peace and stability of the international community. I believe that the Six-Party Talks are the most realistic framework for the resolution of issues relating to North Korea. These are also the view of the entire international community. Thus Japan intends to cooperate closely with the EU and others concerned in seeking a resolution of these issues.
QUESTION: I would like to ask Prime Minister Aso what kind of economic measures you are considering to address the global financial crisis. And I would like to ask Prime Minister Topolanek what economic measures you have in mind to deal with the non-tariff barriers which you mentioned.
PRIME MINISTER ASO: In Japan, following the financial crisis of the 1990s, there were very few borrowers in the market even when the nominal interest rate was lowered to zero. Companies gave priority to minimising their debts first rather than making new investments, and thus there was no increase in investment. The government had no choice but to procure funds by issuing debt in order to achieve economic recovery. This is something that only Japan experienced [at that time], but today, fifteen years later, it is being experienced by the entire world. There have been many recessions during the past 60-plus years, but Japan has been the only country during this period to go through a crisis under deflationary conditions.
In the light of this experience, the two basic things that must be done under the present circumstances are the disposal of non-performing loans and the implementation of fiscal measures. Japan has completed the disposal of non-performing assets, and on 10 April I announced new fiscal expenditures totalling 150 billion dollars. This means there will be [fresh] fiscal spending equivalent to 3 percent of Japan's gross domestic product.
What is important is to learn the lessons of the Great Depression of 1929. First, we must refrain from devaluing our own currencies. And second we must not turn protectionist, by raising tariff barriers etc, and, we must not form exclusive economic blocs.
PRIME MINISTER MIREK TOPOLANEK: I will not accept any criticism suggesting that our government has adopted absurd economic policies. While many countries are still considering how to deal with the economic crisis, we have already taken measures and their results are becoming apparent. The National Economic Council has analyzed data indicating that the unemployment rate in our country remains unchanged. While our two countries face different economic conditions, I believe that we are taking similar responses. Both Japan and the Czech Republic take part in meetings on non-tariff barriers which are held twice a year, where discussions are held on the means to enable companies [of one country] to operate with ease [in the other], but this is taking a considerable amount of time. I hope that the issue can be resolved at [tomorrow's] the EU-Japan Summit Meeting. We need to analyse how Czech companies can more efficiently enter the Japanese market. While the low competitiveness of Czech companies is one factor, there are also non-tariff barriers, such as those of language, culture and transaction costs, and how we can resolve these issues in a rational manner is one topic of further discussion. We must face each concrete issue head-on, and then move on to the next step.
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