Tokyo Plays Its Hand in Europe

JAPANESE leaders carried the promise of their country's economic beneficence to Europe over the past two weeks in hopes of gaining some bounty in return. As Prime Minister Toshiki Kaifu committed nearly $2 billion in aid to two East European countries, his political rival and fellow party leader Shintaro Abe was using the prospect of aid, trade, and technology to move Soviet leader Mikhail Gorbachev toward concessions on the key stumbling block in relations between their two countries.

In their Moscow discussions, Mr. Gorbachev told former Japanese Foreign Minister Abe that he was willing to negotiate a Japanese demand for the return of four northern islands that the Soviet Army took in the closing days of World War II.

This new-found willingness to talk is a change from the ``nyet'' that Gorbachev gave to the islands issue just four years ago.

``This problem,'' reports Mr. Abe, ``has been put on the table.'' Japan's Foreign Ministry spokesman, Taizo Watanabe, says Japan expects ``favorable negotiations'' with Moscow leading up to a Gorbachev visit to Japan in 1991.

In return for Gorbachev's gesture, Abe may have loosened Japan's position of not extending more aid, trade, or technology to Gorbachev's economy until the islands are returned and a postwar peace treaty signed.

``I'd like to think well about your proposals,'' Gorbachev told Abe, ``and take proper measures.''

Japan's apparent change of position shows that it ``may be getting out of the existing framework that `politics and economy are inseparable' and that `the four islands be returned at the same time,''' stated a Wednesday editorial in Japan's prestigious business newspaper, Nihon Keizai.

Any optimism by Tokyo reflects an eagerness to join the ``peace train'' in East-West relations by getting past the island dispute.

Meanwhile, Japan is seeking a role in the reshaping of Europe - the focus of Prime Minister Kaifu's 10-day whirlwind tour of Eastern and Western Europe.

Returning to Tokyo Jan. 18 - slightly embarrassed at being upstaged by the Moscow trip of political rival Abe - Mr. Kaifu was able to put Japan's stamp on European changes by the promise of nearly $2 billion in economic cooperation to Poland and Hungary. More may come in Japan's contribution to a proposed European development bank.

Japanese businesses also lost no time in looking for markets in Eastern Europe. Suzuki Motor Company announced that it will open a car plant north of Budapest. Daihatsu Motor Company seeks to make cars in Poland.

When Japan looks for profits in its global hunt for markets, however, ``it will first go with electronics, such as computer sales,'' says Takashi Murakami, director of economic studies at the Japan Association for Trade with Soviet Union and Socialist Countries of Europe.

But a 15-nation Western bloc restriction on high-technology exports to Communist-bloc nations (which still holds for Hungary and Poland) prevents quick Japanese trade in such products. Relaxing these restrictions was a major topic of Kaifu's visit.

The possibility of a reunited Germany also whets the appetite of Japanese companies.

``Business links with West Germany are already strong,'' says Hisao Kanamori, chairman of the Japan Center for Economic Research. ``Links with a united Germany would energize the world economy.''

He adds that Japanese aid to the Soviet Union would ``help solidify the [economic] ground for Gorbachev, but that cannot be realized without a solution to the territorial problem. At present, only 22 of some 1,000 Soviet joint ventures with Western firms include Japanese partners.

``I think there will eventually be a deal: Japanese economic assistance in exchange for return of the islands,'' Mr. Kanamori says. ``But, if such a step is revealed too early, it will be a problem for the Japanese government. It does not want to be taken advantage of.''

The Japanese were also reminded this week that return of the islands would be a problem for the Soviet government. Reformist Moscow politician Boris Yeltsin was in Tokyo, and said that Soviet public opinion was against handing the islands back. If they were returned, Gorbachev would be ``recalled,'' Mr. Yeltsin said.

Much political maneauvering remains over the island dispute. But both sides feel pressure to compromise. The next threshold comes when the nations' foreign ministers meet in two months. The new fluidity in Japan-Soviet relations is reflected in the fact that no date has been set for the Gorbachev visit next year.