[Provisional Translation]

Opening Statement by Prime Minister Yoshihiko Noda

PRIME MINISTER NODA:I have participated in the G20 at Cannes, followed by the Asia-Pacific Economic Cooperation (APEC) meeting in Honolulu, and the latest meetings with Asian and the Association of Southeast Asian Nations (ASEAN) member countries in Bali. Over three consecutive weeks, I have made overseas visits for these critical international meetings. I believe these repeated face-to-face encounters with various leaders over a short period of time have served as an invaluable opportunity to deepen personal relations of trust between myself and the leaders. These three weeks have truly been significant.

One of the major themes of the meetings in Bali was to further strengthen the “kizuna” (bonds of friendship) with ASEAN.

First, with regard to the Japan-ASEAN Summit meeting, for the first time in eight years, a new Japan-ASEAN joint declaration, the Bali Declaration, and Action Plan were adopted. We confirmed to strengthen “connectivity” by facilitating the smooth flow of people and goods within the region through the development of arterial roads, ports, and other infrastructure in ASEAN, and enhance cooperation for disaster risk management based on the experiences of both Japan and ASEAN as we both have many natural disasters. I also announced that Japan will cooperate with the development plan of Myanmar, which has been making progress in democratization.

Next, with regard to the East Asia Summit (EAS), the United States (U.S.) and Russia newly joined from this year and we agreed to reinforce efforts in the political and security areas. In particular, with regard to the seas, which are public goods connecting the Asia-Pacific region, we were able to confirm the importance of international law. Based on Japan’s proposal, we were able to obtain understanding among EAS participating countries to advance cooperation and dialogue on maritime issues. Furthermore, we were able to obtain the understanding of the respective countries with respect to the concept proposed by Japan for the establishment of a low-carbon society, which will lead to economic growth. I believe, with this meeting, we have established a path for the EAS to become a more important forum for the cultivation of a common vision under the leadership of its leaders.

To date, I have stressed that there are a variety of paths to realizing the Free Trade Area of the Asia-Pacific (FTAAP). At this meeting, I underscored that Japan will play a leading role in contributing to not only the Trans-Pacific Partnership (TPP) but also the creation of a framework for economic partnership based on the so-called ASEAN+3 and ASEAN+6, and I was able to obtain the support of many countries.

In particular, at the ASEAN-related summit meetings, I believe progress has been made in that it was agreed that working groups will be established among the ASEAN countries and relevant countries with regard to the East Asian Free Trade Agreement (EAFTA) and the Comprehensive Economic Partnership in East Asia (CEPEA) based on the Japan-China joint proposal.

Next, I would like to discuss the results or the outcomes of the bilateral meetings. At the summit meeting between Japan, China, and the Republic of Korea (ROK), which was held today, we agreed to conclude the joint research on the Japan-China-ROK Free Trade Agreement (FTA) by the end of this year. We are a step away from reaching its precursor, the Japan-China-ROK investment agreement, and I strongly urged that we make efforts toward concluding this agreement. Also, a fruitful exchange of views took place on the regional situation, including North Korea, and the international situation. I requested the continued cooperation of China and the ROK for the resolution of the abduction issue.

With Premier Wen Jiabao of China, while our discussion was brief, we confirmed to hold thorough talks on the occasion of my visit to China.

At my meeting with President Thein Sein of Myanmar, I commended the certain progress that Myanmar has made toward democratization and national reconciliation. The President expressed hopes for Japan’s assistance.

Through the series of summit meetings, I was able to feel firsthand the warmth and kindness extended by ASEAN countries to Japan. I would like to continue to put emphasis on fostering the friendship and cooperative relations between Japan and ASEAN that my predecessors have nurtured, and strive to establish order for a prosperous and stable Asia, create common rules for the region, and strengthen the network of cooperation.

Before concluding my opening statement, I would like to once again express my appreciation to President Yudhoyono and the Indonesian Government and to the people of Indonesia for their efforts to make these meetings a success.

 

Q&As

 

REPORTER (Yamaguchi, NHK):Today the leaders of the United States and China held a summit meeting at a short notice. It also appears that tensions are rising in U.S.-China relations. What sort of diplomatic role do you think Japan can play in order to alleviate such tensions? In addition, how do you intend to put Japan-China relations back on track, which have been dented by the collision involving a fishing vessel off the Senkaku Islands?

PRIME MINISTER NODA: In terms of our relations with China, I recently held a summit meeting with President Hu Jintao at the APEC Economic Leaders’ Meeting in Honolulu. At that time we shared a mutual recognition that rather than seeking to simply enhance our bilateral relations, partnership and cooperation between Japan and China will lead to regional and global peace, stability and prosperity. Based on this recognition, at the recent summit meeting we confirmed our shared intention to further deepen a mutually beneficial relationship based on common strategic interests. Although our interaction this time was brief, I have had similar discussions with Premier Wen Jiabao. In these discussions I noted that China’s development represents an opportunity for the international community, including Japan, and we share a common basic recognition that as next year will mark the 40th anniversary of the normalization of relations between Japan and China next we should work to further deepen our mutually beneficial relationship based on common strategic interests. In order to further stimulate such advances in our relations I would like to pay a visit to China before the end of the year.

I have already touched on this point briefly, but Japan and China have to date proposed the establishment of working groups on such initiatives as the East Asia Free Trade Area (EAFTA), which would cover ASEAN+3, and also the Comprehensive Economic Partnership in East Asia (CEPEA) initiative, which would encompass ASEAN+6. Both Japan and China have strengthened their calls on the countries of ASEAN at this summit to further accelerate discussions in these areas. ASEAN is also demonstrating a basically positive stance to these initiatives and we seek to further develop our relations in concrete terms from now.

REPORTER (Fitrianto, Kompas): I have a question concerning the expansion of U.S. military forces in the Asia-Pacific region. The United States is seeking to station U.S. Marines in Australia. What kind of long-term impact will such a policy have for Japan? What is your evaluation of the situation?

PRIME MINISTER NODA: The Government of Japan believes that U.S. interest in the Asia-Pacific region is increasing and its engagement with the region is also deepening, not merely in terms of security but also in economic aspects, as evidenced by the U.S. participation in the East Asia Summit (EAS) and also in discussions that took place at the APEC Economic Leaders’ Meeting. This is therefore something that is basically to be welcomed. As I have just mentioned, this is the first time for the United States to participate in the EAS. I believe that in addition to the working-level discussions that have been held in the forum of the EAS to date, the participation of the United States will provide an opportunity to deepen dialogue on political and security issues.

Whatever the case, the Japan-U.S. Alliance is an asset for the public goods in the Asia-Pacific region. Accordingly, through the Japan-U.S. Alliance we seek to contribute to peace and stability in the Asia-Pacific region.

REPORTER (Indo, Nihon Keizai Shimbun): I have a question concerning the compilation of the budget for next fiscal year, preparation for which is about to be initiated. Do you think that it will be possible to ensure that the level of issuance of government bonds will be able to be kept at a level that does not exceed the issuance for this year, with the exception of reconstruction bonds? Also, with regard to an increase in consumption tax, do you believe that the Government will be able to draft a bill by the end of the year for approval by the Cabinet? Will consultations on such a bill with the opposition parties, including the Liberal Democratic Party (LDP) and New Komeito begin after Cabinet approval has been given?

PRIME MINISTER NODA: Diligent efforts are already underway to compile the budget for next fiscal year. Work is currently ongoing to reduce certain budget expenditure and reallocate these parts of the budget to priority items. The Medium-term Fiscal Framework stipulates that government bond issuance should be kept at around the level of 44 trillion yen. As the budget is being compiled in accordance with the Medium-term Fiscal Framework, the basic posture of the Government is to make maximum efforts to respect this stipulation and ensure that bond issuance is kept under the 44 trillion yen ceiling.

The final draft of the proposal for the comprehensive reform of social security and taxation systems was completed in June this year. Based on this final draft, discussions to crystallize social security reform are being implemented, and discussions, mainly by the Tax Commission, to finalize fundamental reform of the taxation system, including consumption tax, which will support the reform of social security structures, are being advanced, with a view to reaching a conclusion by the end of the year. Once a conclusion has been reached, however, it does not mean that it will be approved by the Cabinet. The time for Cabinet approval will be when the Diet convenes and the draft bill is submitted to the Diet. Prior to that we will engage in earnest policy consultations among not only the ruling parties but also with the opposition parties, as work to ensure the sustainability of the social security system in the future and how to ensure sufficient financial resources to support social security are issues that can no longer be delayed and must be dealt with by any administration.

REPORTER (NISHIKAWA, REUTERS): Concerning the recent financial crisis, which reflects the investors’ concern towards the eurozone debt crisis, to what extent is Asia exposed to the European crisis? Also, do you agree that Asian countries should have a so-called contingency plan? If that is the case, what kinds of plan have been discussed?

PRIME MINISTER NODA: At today’s Japan-China-ROK Trilateral Summit Meeting, each of us revealed our opinions about global economic issues. At other summit meetings held in Bali, too, each leader shared in some form a sense of crisis over the situation in Europe. In that sense everyone is aware that it is not a fire on the other side of the river, but this does not necessarily mean that the Asian economy is vulnerable to the shock or the crisis. Generally speaking, since the Asian currency crisis, Asian economies have been implementing prudent macroeconomic policies and sound policy management, and are expanding current-account surpluses and holding high levels of foreign currency reserves. I believe that the resilience of the Asian economy to external shocks has been increasing in general compared to the past.

That being said, in case the European crisis cannot be firewalled and spreads beyond its borders, it would inevitably bring about negative impacts. We need to respond to such a situation, and I believe this response will be based on financial cooperation.

We have already been promoting the Chiang Mai Initiative (CMI) within the ASEAN+3 framework, in addition to which I compiled a new bilateral currency swap agreement with the ROK during my visit to Seoul in October, expanding the cap from 13 billion US dollars to 70 billion US dollars. Shortly afterwards, China and the ROK also implemented a currency swap agreement. It is important that each country is ready to cooperate in responding to emergencies through such efforts. Furthermore, Japan is recently leading discussion on introducing a crisis prevention mechanism for regional-level crisis prevention. I believe this idea also needs to be quickly consolidated, and I have made such a proposal at this ASEAN+3 Summit Meeting.