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American Morning

Bush Endorses Japanese Prime Minister's Recession Plan

Aired February 18, 2002 - 08:12   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: President Bush on a three-nation tour through Asia this week. And while in Tokyo this morning, he offered an endorsement of Japan's prime minister's outlook and program to get the country out of recession. It's been in one for the last 10 years. What concerns the people of Japan though, more, is perhaps not what the president said today, but those three words that he uttered in his State of the Union address in January.

CNN's senior White House correspondent John King is traveling with the president in Asia and filed this report from Tokyo.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're fighting evil.

JOHN KING, SR. WHITE HOUSE CORRESPONDENT (voice-over): The U.S. president saluted Japan's support in the war on terrorism. And he brushed aside criticism from France and others, who say he appears to eager for a showdown with Iraq, Iran and North Korea.

BUSH: They should make no mistake about it that we will defend our interests. And I will defend the American people.

KING: But there was a noticeable change of tone. Mr. Bush stressed diplomacy is his first option, and he did not repeat the phrase, "axis of evil." Those words were viewed by many in Japan as too provocative. And Prime Minister Koizumi made clear his goal is normalized relations with North Korea. But he also said he took no offense to his guest's tough talk.

JUNICHIRO KOIZUMI, JAPANESE PRIME MINISTER (through translator): The expression "axis of evil" I believe reflects the firm resolve of President Bush and the United States against terrorism. President Bush, I believe has been very calm and cautious vis-a-vis Iraq, Iran and North Korea.

KING: Mr. Bush returned the favor when talk turned to the struggling Japanese economy. The prime minister is falling in the polls and is having trouble selling his economic reform agenda.

BUSH: Sometimes it is not easy to get others to follow. But that's his job is to lead, and he knows that. And that's why I am -- one, I like him a lot, because I appreciate bold leadership. And, secondly, he is going to stay the course.

KING: The day's overriding goal was to present a picture of unity. Yabusame is a tradition that dates back to the sixth century. Back in November, the prime minister gave Mr. Bush a yabusame bow as a symbol of Japan's support in the war on terrorism. Not that everything went according to script.

(END VIDEOTAPE)

The yen briefly dipped in currency markets against the dollar after Mr. Bush said he and the prime minister discussed devaluation. The White House rushed to say Mr. Bush meant to say deflation, not devaluation, and that the president was by no means voicing support for a weaker yen. The markets quickly adjusted; everything is back to normal. But for a minute there, one of those what the president meant to say moments -- Jack.

CAFFERTY: John, the Japanese economy has been in recession, as I mentioned in the intro, for the better part of the last 10 years. And some economists suggest that until the country -- the society, the Japanese people, if you will -- are willing to undertake certain structural reforms, that no political agenda is going to be able to solve the economic problems of that country. And that perhaps is why even Mr. Koizumi, who rode in on great waves of popularity after he was elected, is beginning to lose favor with the Japanese citizenry.

Now what's going to have to happen within the culture of Japan to solve the country's economic problems?

KING: Well certainly, Jack, that will be the president's message, we are told -- politely so -- when he addresses the legislature here, the Japanese diet tomorrow. Mr. Bush does not believe the prime minister is the problem. He believes there is an entrenched bureaucracy of business culture, pro business culture, in the government, also in the diet as well, because of special interest politics here in Japan. Mr. Bush will make the case that Japan has to write off all those non-performing loans at the banks. Has to get about regulatory and other reforms.

In public he'll be quite polite about it, but that is one of the reasons he will speak to the diet here, to try to make the case that he believes the prime minister has a good plan and that it's time for the country -- especially the politicians -- to rally around him.

CAFFERTY: One more question, John, if you have a second. There were demonstrations in the streets protesting President Bush's visit. What were those about?

KING: The Kyoto Treaty on global warming. They take great pride in that treaty here in Japan. Of course, it was negotiated here. The Japanese government is going forward with its compliance with the treaty. Mr. Bush won't sign on. He says it would punish the U.S. economy to have mandatory reductions in greenhouse gas emissions, especially carbon dioxide. Bush also says it's unfair that developing countries are exempt. Still, another case in which these two leaders tried to show their friendship. The prime minister said he wants to hear more from the United States. But he did call that voluntary plan to reduce CO2 emissions Mr. Bush released back in Washington last week a very positive development. So again, one way you test an alliance to see what the leaders say in public even when you know they had some differences in private -- Jack.

CAFFERTY: All right. Thanks, John. John King, senior White House correspondent, reporting from Tokyo.

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