Distinguished Guests, Ladies and Gentlemen,

It is a great pleasure for me to have come back to Belfast after a ten-year interval, the hometown of that great footballer, George Best. I really feel at home amid Belfast's splendid architecture and the beautiful scenery nearby. At the same time I sense that the buds of economic and social dynamism just visible ten years ago are really blooming now. I am most pleased to see you all at this Japan Day Seminar, which I believe provides an important occasion for me to learn more about Northern Ireland and to keep you updated on Japan-UK relations.

As Deputy Chief of Mission at the Japanese Embassy I have the agreeable duty of facilitating better mutual understanding between the British and Japanese peoples and of promoting the overall Japan-UK relationship. What does this mean? We often say that the main problem facing us here is that there is no pressing issue between Japan and the UK! This is not a joke, but witness to the fact that Japan-UK relations have never been better. The primary mission for us, therefore, is not necessarily to engage in trouble-shooting in the bilateral context but to formulate and coordinate policies on what Japan and the UK should do for the benefit of our two peoples as well as for the peace and stability of the world. This is a forward-looking and pleasant duty to fulfil - a real luxury only granted to those posted to a capital like London.

Overall, Japan-UK relations today are solid and mature. They are functioning smoothly, based upon market mechanisms and subject to the rule of law. Government intervention is rarely required. In business, tourism, culture, education and most other respects, our ties are refreshingly free of major areas of concern. In this sense, the Thatcher government's determined approach to the Japanese government and business sector in the 1980s in pursuit of direct investment from Japan in the UK, notably by Nissan in Sunderland, has acquired anecdotal status. Meanwhile, it is seldom recalled these days that the Japanese and British governments quietly coordinated their efforts so as to come up with a final settlement of the liquor tax issue after the WTO panel had ruled against Japan in the mid-1990s. The records of these episodes are now filed away somewhere, gathering dust.

More relevant today is the fact that about 1,200 Japanese companies are operating in the UK as good corporate citizens, having put down deep roots in their respective communities. They have created around 90,000 jobs. Indeed, a number of these companies, some of them household names, go about their business as they always have done; therefore, few people are aware that they have Japanese owners. In the fashion world DAKS and Aquascutum come to mind, while Leicester-based Freed, a world-class manufacturer of toe shoes, is another example. The UK continues to be the most favoured destination in Europe for Japanese direct investment. Just last week, for example, the large pharmaceutical company Eisai announced a 75-million pound new investment in Hertfordshire.

In Northern Ireland four Japanese companies have business operations, and two of them are engaged in research and development in high-tech fields - a growing trend today. I am pleased to note that they have expanded their activities over the past decade through the enlargement of production facilities and in other ways. In addition, three Japanese companies have business tie-ups in research and development here. Yet I must say that, compared with the other regions in the UK, Japan's business presence in Northern Ireland is modest in scale even when the size of the region is taken into consideration. How come, one may ask? I do not have a simple answer. Belfast is a shipbuilding city famous for the Titanic. Northern Ireland is regarded today as one of the world's high-tech centres. The province can be proud of its long tradition of engineering prowess, its development of new technology and the high quality of its workforce; these attributes cannot but draw our attention and interest. I am keen to study how potential Japanese business partners can explore what Northern Ireland has to offer. In that sense I am looking forward to visiting Invest Northern Ireland tomorrow and expect a fruitful meeting there.

Now, let us look at Japan-UK relations in other areas. Firstly, more than 8,000 Japanese students are studying at British universities and schools all over the UK. In addition, a considerable number of Japanese artists are active in London, seeing it as the ideal place from which to make their world debut. Would it surprise you to know that the Japanese comprise the largest group of foreign students in the Royal Academy of Music today? Meanwhile, about 400,000 Japanese tourists visit not only London but various locations in the UK every year, enjoying this country's history and culture, its arts, gardens, landscape, country life, sports and so on.

In all these cases the UK is chosen as a favoured destination by individual or commercial judgement. The motivations of the people concerned are varied, but there seems to be a common denominator in their thoughts: they see the UK as "comfortable". By the same token, I would like to encourage you to visit and to invest in Japan, as Japan is also "comfortable"! Evolving in this way, Japan-UK relations are in a very healthy state, and I am pleased to be engaged in promoting such a sound partnership.

Of course, what I have said so far does not mean that there is no role for the government to play. On the contrary, there is scope for government initiative, such as in efforts to improve the business environment. Let me touch upon two such cases.

The first concerns the conclusion of the Japan-UK Social Security Agreement. Owing to a change in the British regulations on national insurance contributions in 1994, Japanese companies operating in the UK found themselves in the position of having to pay employers' contributions for their staff sent from Japan to both the Japanese and British authorities. This duplication placed a substantial financial burden on those companies to the order of an additional 10 million pounds per year altogether. Therefore it was quite natural that the Japanese Chamber of Commerce and Industry in London requested us to start talks on an arrangement to avoid such dual payments. Against this backdrop, five rounds of negotiations were held between our two governments, and the Social Security Agreement was signed in February 2000. A year later the Agreement came into effect, and the dual payments formally disappeared. This is a mutually beneficial arrangement.

The second case involves the revision of the Japan-UK Income Tax Treaty. The current treaty, aimed at avoiding dual taxation, came into effect in 1970 and was slightly modified in 1980. In 2004, our two governments agreed to review the treaty so as to keep up with the times. It did not take long before agreement was reached, and today the new treaty was signed in London. The treaty has yet to be ratified, but if it comes into effect taxes levied in the country of origin against foreign companies on dividends, interest and royalties will be substantially reduced. As this is also mutually beneficial, I am sure that both Japanese and British companies operating in each other's country will enjoy the resulting benefits.

These two measures are both conducive to stepped-up business activity, in particular direct investment between our two countries. We in the Embassy will continue to play a role in this kind of initiative to improve the business environment.

In cultural and grassroots exchange, the government plays a supportive rather than a hands-on role. Last year was designated as the EU-Japan Year of People-to-People Exchanges, and a variety of events were implemented in Japan and the 25 EU member states to promote mutual understanding. In London we set up a steering committee with fourteen other organizations to share information and to identify various promising events as well as to coordinate ideas and efforts. No fund-raising or allocation of resources was made this time, unlike with Japan 2001. Rather, a contemporary approach - now favoured in many countries - was adopted, the essence of which is "no public funds, but various other means of support". The result was that more than 200 events were implemented in the UK, which marked the largest number among the EU members. These events were quite useful in encouraging grassroots exchange as about 70% of them were held outside London. It was individuals and private organisations that initiated and implemented most of the events. This indicates the wealth of people there are in the UK who are dedicated to boosting mutual understanding. They are great assets for us all, and so is the network of ties embracing them, their organisations and us.

Northern Ireland is no exception in this regard. Last September the Japanese Festival "Matsuri" was held in Carrickfergus, in which I hear 2,000 people participated. I am encouraged by the strong interest that Northern Irish people showed in Japan on that occasion. To be honest, however, as compared with the other regions in the UK, Japan's cultural and social linkage with Northern Ireland is relatively weak. Perhaps it may have something to do with Northern Ireland's geographical separation from the rest of the UK. Yet physical distance cannot be a major hindrance in a high-tech era of global communications. If a good network of communications is built among the people dedicated to furthering our relations, we can work more closely on a day-to-day basis. Therefore I would like to pursue how we can build such a network.

Here I would like to add two footnotes. First, the Japan Exchange and Teaching - or 'JET' - programme. JET has been a real success story for Japan's foreign policy for the past twenty years. From Northern Ireland we have received a number of promising young people who have played a very positive role in fostering grassroots exchange while staying in Japan, in addition to their contribution to Japan's English language education. Their role as a bridge between our cultures cannot be underestimated, and this remains the case even after they have come back here. I do hope that they will continue to function as grassroots ambassadors so as to bring our two peoples closer together. We in the Embassy are ready to extend whatever assistance we can to this end.

The second point concerns the Japan Society of Northern Ireland. I still remember being invited to address the luncheon gathering to mark the launch of the Society about ten years ago. I am sure that the organisation has established firm roots in the decade since then. Certainly, the Society can take great pride in organising the Japanese Festival, which I have just mentioned. I wish the Society all success in the years to come in its role of nurturing friendship between the Japanese and Northern Irish people.

It is you who have the major role to play in grassroots exchange. What we, the government, can do is just to support your efforts and not to replace you. We give advice but do not intervene. Your initiatives are respected. Therefore, let us work together.

At this point, I would like to shift the focus from the bilateral to the global scene. Unlike business and grassroots exchange, governments play a major role in foreign and security policy. Here close consultations and policy coordination between our two governments are crucial at all levels. Our areas of interest are wide-ranging, from the Korean Peninsula and China to South Asia, the Middle East and Africa, and we are engaged in extensive consultation and cooperation. We call it the Japan-UK strategic partnership or global partnership, and its history dates back some time. Yet the scope of our consultations has been broadened and the substance of our cooperation has been deepened over time, in particular since 9/11. Accordingly, there are frequent visits to the respective capitals of the people concerned. In particular, the first half of January was a busy time. Over just two weeks we received from Tokyo four cabinet ministers, including those of defence and education, two parliamentary delegations and a Parliamentary Vice Minister for Foreign Affairs. They had fruitful talks with their counterparts.

Now I would like to be more specific, touching upon Iraq as an example of the Japan-UK partnership.

Last year we witnessed the moment of truth in Iraq. With two elections and a referendum held peacefully, the political process has made good progress. Yet this year will be more important. The Iraqis will have to sit in the driver's seat as a sovereign state to direct their political and economic future once a formal Iraqi government is established. Unfortunately, however, security threats have not diminished. A great deal of work remains to be done towards economic rehabilitation and reconstruction. It will not be an easy task to coordinate the interests of various competing political groups and to implement policies that bear fruit. Even if continued assistance may be expected from the international community, it is the Iraqis themselves that are responsible for their own future. Clearly, they cannot remain entrenched in internal political battles. Let me elaborate on the major challenges they will face.

First, we hope that a formal Iraqi government will be established as quickly as possible to avoid a political vacuum. Yet it is even more important that the major political groups, including the Sunnis, be represented in the new government in a balanced manner, even if this takes some extra time. It is crucial that people of high calibre be employed irrespective of their political backgrounds. What is essential in Iraq is to achieve genuine national reconciliation beyond religious, ethnic and regional rivalries. It is critically important to mobilise a wide range of people not necessarily happy with things at present to join in the work of building a new, democratic Iraq. Otherwise internal fissures may develop, creating room for terrorists and anti-regime militants to exploit. From this point of view Japan and the UK are watching political developments in Iraq carefully and are ready to offer the Iraqis whatever advice and assistance are necessary through close consultations.

Secondly, establishing peace and order continues to be an urgent task. Without internal security no social stability or economic rehabilitation can be achieved. In some areas bomb attacks and kidnappings continue, and so do bitter struggles among political groups or tribes. The level of crime is also serious. However, there is good news too. The Iraqi security forces have been strengthened and made more capable thanks to the training and assistance extended by the coalition forces. It is desirable that the Iraqi forces should gradually move to the front line in security missions, although this depends on the areas and units concerned.

Both Japan and the UK maintain their forces in the southeastern part of Iraq. Six hundred personnel from Japan's Self Defence Forces are stationed in Samawah, providing humanitarian assistance for local Iraqi needs in cooperation with the Australian and British forces. This year the challenge for us is to prepare for the transition of power, in consultation with the Iraqi government and taking into consideration local security conditions, the capabilities of Iraqi units and so on. We need much closer coordination as we are in the same boat.

Thirdly, the economic and social reconstruction of Iraq has a long way to go. Poor security conditions hinder the smooth operation of reconstruction work. In such circumstances Japan has implemented grant-in-aid of 1.5 billion dollars for Iraq's immediate needs. Japan has also accepted the writing off of 80% of the official debts it is owed by Iraq, amounting to 5.8 billion dollars. Moreover, Japan is now preparing soft loan projects worth up to 3.5 billion dollars to tackle the country's longer-term challenges. Reconstruction work requires a much longer perspective than is the case with the political process and security. The capacity-building of local governments is crucial. In addition, we need more partners to work with in this regard. While Japan and the UK are already partners in this endeavour, we may be able to explore more extensive aid policy collaboration, just as we do in other parts of the world.

Japan and the UK are committed to working together to ensure that a democratic, stable and prosperous Iraq emerges. Whether we succeed or not has serious implications for our battle against terrorism. It may also have a great impact on the long-term stability of the region, a major supplier of oil and gas to the world.

While Iraq will continue to be a key area for the Japan-UK partnership on the global scene for some time, there are other important issues in which our two countries share interests. The subject of Iran and the risk of nuclear proliferation needs to be addressed urgently; in Afghanistan, the management of the post-conflict situation is still precarious; and the Middle East peace process is now at the crossroads. All of these are high-priority issues. In the east of Eurasia, the Korean Peninsula and China are two focal points on which we have close consultations. So are the questions of UN reform, climate change and African development.

During my tour of duty I would like to help broaden the common agenda on which Japan and the UK are working together for world peace and stability, based upon our set of common values and shared interests. I know I can rely on your valuable support and advice in this endeavour.

Thank you very much.