Japan: Summit hopes hit by collapse

NEW CLOUDS descend over the forthcoming Tokyo Economic Summit with the collapse of Kiichi Miyazawa's government.

There are only three weeks before the summit and a draft communique has already been written. That piece of paper may need to be shredded quickly if, as Western officials fear, the caretaker Japanese government is unable to deliver firm commitments.

With no seat on the United Nations Security Council, Japan sees the G7 summits of leading industrial nations as one of its main channels for flexing its economic muscle to influence world events. The Japanese establishment, which has fretted about the success of the summit for months, will be worried by the latest events.

This time around, the summit is to be the forum for genuine negotiations over world trade, involving painful politicial decisions. The industrialised democracies now face a summit chaired by a caretaker government, more than usually under the influence of the powerful bureacracy.

Tokyo was seen as a chance for the summiteers to redeem themselves after a run of largely meaningless gatherings. With the world economy still in trouble, many have pinned hopes for a revival in business confidence on a breakthrough for the long- stalled Uruguay Round of world trade talks.

The Uruguay Round embraces trade in farm and copyrights as well as manufactured goods. Japanese politicians, for instance, will be faced with politically costly decisions on opening up the rice market to foreign competition. There are worries that if the leaders fail to break the Gatt deadlock, protectionism could break out and darken the outlook for global economic recovery.

Western diplomats yesterday expressed concern over Japan's ability to negotiate seriously on world trade issues at a ground-breaking meeting of G7 trade ministers next week. The talks are to set the scene for agreement on an outline Gatt accord on market access and tariff reduction.