[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 392 Introduced in House (IH)]







105th CONGRESS
  2d Session
H. RES. 392

   Relating to the importance of Japanese-American relations and the 
  urgent need for Japan to more effectively address its economic and 
    financial problems and open its markets by eliminating informal 
   barriers to trade and investment, thereby making a more effective 
 contribution to leading the Asian region out of its current financial 
 crisis, insuring against a global recession, and reinforcing regional 
                        stability and security.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 24, 1998

   Mr. Bereuter (for himself and Mr. Berman) submitted the following 
   resolution; which was referred to the Committee on International 
 Relations, and in addition to the Committees on Banking and Financial 
     Services, and Ways and Means, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                               RESOLUTION


 
   Relating to the importance of Japanese-American relations and the 
  urgent need for Japan to more effectively address its economic and 
    financial problems and open its markets by eliminating informal 
   barriers to trade and investment, thereby making a more effective 
 contribution to leading the Asian region out of its current financial 
 crisis, insuring against a global recession, and reinforcing regional 
                        stability and security.

Whereas the maintenance and improvement of a very positive international 
        relationship between the United States and Japan is vital to the two 
        countries and to the entire global economic and trading system;
Whereas the United States-Japan Security Alliance and close economic cooperation 
        have underpinned the security, stability, and prosperity of the Asia-
        Pacific region, thereby allowing that region to enjoy unmatched economic 
        growth and development for nearly three decades;
Whereas the current financial crisis in Asia threatens the foundation of Asia's 
        unmatched peace and prosperity, the stability of the global economic 
        system, and related vital American security and economic interests;
Whereas Japan's generous contributions to second line credits for the three 
        International Monetary Fund program countries, South Korea, Thailand, 
        and Indonesia, totaling $19,000,000,000, and its substantial structural 
        adjustment loans and export credits to Indonesia, have helped contain 
        the financial crisis, but are an inadequate alternative to a strong 
        Japanese economy;
Whereas Japan accounts for three-fourths of the total East Asian Gross Domestic 
        Product and therefore has the potential to help pull the region out of 
        the financial crisis by serving as its ``engine of growth'', just as the 
        United States, by being an ``engine of growth'' and having open markets, 
        earlier assisted Mexico emerge from a substantial financial crisis;
Whereas deteriorating economic conditions and ongoing financial market 
        turbulence in Asia make it increasingly important that Japan play a 
        leadership role in helping to restore confidence in the economic future 
        of the region;
Whereas that regional leadership role coincides with Japan's stated goal of 
        promoting strong domestic demand-led growth and avoiding a significant 
        increase in its external trade surplus;
Whereas Japan's continued economic stagnation depresses the level of its imports 
        from the United States and other countries in the Asia-Pacific region, 
        thereby forcing its neighbors in the region to rely more heavily on 
        their exports to the United States for growth;
Whereas weakened economic fundamentals in Japan and an accommodative monetary 
        policy, coupled with a robust United States economy, have weakened the 
        value of the Japanese yen against the United States dollar and therefore 
        stimulated a rapid expansion of exports and a fast-growing merchandise 
        trade surplus with the United States, which increased from 
        $48,000,000,000 in 1996 to $55,000,000,000 in 1997;
Whereas the bursting of Japan's investment bubble in 1991 has been accompanied 
        by protracted asset-price and balance sheet adjustments by Japanese 
        financial institutions, leading to a scarcity of credit and weak growth;
Whereas policies favoring low interest rates had encouraged, until recently, 
        excessive private sector lending to overly indebted enterprises in 
        Indonesia, Korea, and Thailand, and thereby contributed to the private 
        debt crisis in the region;
Whereas the resulting current poor asset position of Japanese banks and 
        financial institutions has created a domestic credit crunch that greatly 
        hinders their role in Japan's economic recovery;
Whereas past efforts to stimulate recovery through deficit spending targeted on 
        the construction sector have proved inadequate and failed to accomplish 
        their desired objectives;
Whereas the 1997 consumption tax increase choked off a promising acceleration of 
        economic growth;
Whereas inadequate deregulation initiatives have failed to restore vitality to 
        the Japanese economy, while truly significant deregulation could add as 
        much as a percentage point or more to Japanese economic growth; and
Whereas the continued failure of the Government of Japan to properly recognize 
        and remedy the aforementioned policies will both prolong the Asian 
        financial crisis and contribute to the inevitable rise in the American 
        trade deficit with Japan, thereby potentially undermining American 
        domestic support for close economic, political, and security cooperation 
        and coordination between the United States and Japan at a critical point 
        in history: Now, therefore, be it
    Resolved, That it is the sense of the House of Representatives that 
Japan should urgently undertake the following steps to enhance alliance 
cooperation and raise Japan to the position of regional partnership 
that it should enjoy by virtue of its economic and technological 
achievements and its democratic political system:
            (1) Undertake a broader and faster deregulation of its 
        economy, in order to improve long-term growth prospects and 
        promote opportunities for foreign firms, improve transparency 
        and disclosure, reward innovation and competition, and reduce 
        systemic risk.
            (2) Further open its distribution system to eliminate 
        exclusionary and discriminatory business practices that are not 
        only limiting imports but stifling economic growth and 
        competition in Japan.
            (3) Fully honor and implement its bilateral trade 
        agreements with the United States as well as its multilateral 
        trade commitments.
            (4) Take other aggressive steps to reduce numerous barriers 
        to imports and foreign investment and seek to lower its current 
        account surplus to 2 percent or less of Gross Domestic Product.
            (5) Move promptly to dispose of nonperforming bank loans by 
        disposing of nonperforming real estate and other loans and by 
        allowing the market to determine the real value of these assets 
        and loans.
            (6) Take immediate steps to address systemic problems in 
        the banking system, close insolvent banks, and recapitalize 
        weaker banks with banks that have strong fundamentals and good 
        management.
            (7) Address its fiscal problems in a manner that does not 
        jeopardize economic recovery, with an emphasis on significant 
        and meaningful tax cuts rather than sectorally oriented 
        stimulus.
            (8) Adopt all appropriate policies to strengthen the 
        Japanese yen.
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