In its first economic protest of the invasion of Afghanistan, the Japanese government has decided to suspend any new credits for joint development projects in the Soviet Union, government sources said today.
The sources said the agreement was reached last night by Prime Minister Masayoshi Ohira and top government officials and that details will be explained to the U.S. Embassy later today.
According to Japanese press accounts this morning, the new loans to be suspended would involve three joint development projects to Siberia amounting to about $1.4 billion.
However, Japanese officials said the exact list of projects is still under debate within the government and with private industry. Companies involved in the project were reported to be arguing against cutting off the loans.
Sources said the final decision on what credits will be suspended will be made by the Japanese Export-Import Bank, which provides most of the financing for the Siberian projects.
[In London, Washington Post correspondent Leonard Downie Jr., who has been monitoring European responses to U.S. calls for retaliatory steps against the Soviets, said the Japanese action appeared to be the strongest yet taken by an American ally.]
[Britain has cut off its own preferential trade credits with Moscow, but that move does not interrupt existing trade, Downie reported.]
The loan suspension would be the second action authorized recently by Japan to demonstrate its opposition to the Soviet invasion of Afghanistan. The government already has recommended that Japan go along with the United States in opposing participation in the Moscow Olympic games.
Japan also has indicated informally that it will go along with the United States and West European countries if they decide to suspend exports of some high-technology items to the Soviet Union. The issue of which items would be affected by such a ban is now being debated in the Paris-based coordinating committee known as Cocom, which supervises exports of technology to communist countries.
There has been an intense debate within the Japanese government about which actions, if any, to select as a sign of protest. Japan has been under American pressure to exert economic sanctions against the Soviet Union but many in the government have feared alienating the Soviets, who have greatly increased their military power in this region in the past few years.
In late January, Prime Minister Ohira said in a major policy address to parliament that Japan would be called on to make some sacrifices because of the invasion of Afghanistan, but he did not spell out what would be done.
Even today, Japanese officials declined to use the word "sanctions" in describing the consensus reached last night in talks between Ohira and officials of the foreign and finance ministries and the Ministry of International Trade and Industry.
The officials emphasized that credits would not be suspended for joint development projects already under way with the Soviet Union.
It appeared likely that three Siberian projects now in the planning stages would be affected. They are a forest development project, a pulp factory in Sakhalin and expansion of the port of Vostochny on Sakhalin.
An additional $400,000 loan for development of a coal mine was also under study.