[Congressional Record Volume 140, Number 134 (Thursday, September 22, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 22, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
             SUPER 301 AND UNITED STATES-JAPAN NEGOTIATIONS

 Mr. BAUCUS. Mr. President, a week from today, on September 30, 
we will reach the deadline for naming unfair trade practices under 
Super 301. With that on the horizon, I rise today to express my concern 
that time is running out on the framework talks with Japan.


                         framework negotiations

  The framework talks have now continued for 14 months. They began 
after President Clinton's meeting with then-Prime Minister Miyazawa at 
the 1993 G-7 meeting in Tokyo. At that time, we agreed on three major 
points. The President and Prime Minister pledged to: No. 1, open 
Japan's market in the insurance, auto, and auto-parts sectors; make 
Japan's Government procurement policies in telecommunications and 
medical equipment more open and fair; No. 2, stimulate consumer demand 
in Japan through macroeconomic policy reforms; and No. 3, make the 
United States more competitive through deficit cutting and responsible 
fiscal policy.


                      results of these commitments

  The third of these areas received the least attention. But it has 
been by far the most successful. The United States has lived up to its 
commitment. Last year's budget reduced the Federal deficit by $480 
billion over 5 years, created a stronger base for American economic 
growth without inflation, and created about 2 million new jobs. It is 
no exaggeration to say that every prediction its opponents made about 
this budget has been proven wrong.
  We have seen much less in the other areas of the framework agreement. 
The talks have dragged on month after month. Mexico has passed Japan as 
our second largest government. Three Japanese Governments have come and 
gone. But through it all, two things have remained constant: the 
Japanese bureaucracy's determination to avoid deregulation and market-
opening measures, and the rise in Japan's trade surplus.
  Now, however, we have reached a moment of truth. Either Japan will 
agree to market-opening measures in insurance, government procurement, 
and automobiles--areas in which the collusive practices and barriers to 
access are blatant--or the United States must proceed under the 
President's Super 301 Executive Order toward possible sanctions.
  This is not inevitable. Over the last few weeks, the United States 
and Japan have made significant progress on reaching agreements on 
insurance and government procurement. Japanese Foreign Minister Kono 
met the President yesterday. Negotiations are continuing. And I would 
hope that deals can be reached in these two areas.
  In the auto and auto parts sector, however, the picture is still 
grim. The Japanese auto industry has threatened to stop its 
``cooperation'' with American auto companies if the United States 
stands firm. I respectfully submit that is a threat so hollow as to be 
ridiculous. It is like the lion threatening to stop lying down with the 
lamb. In any case, in this area as others, I look forward to and hope 
for progress.


                        assessment of super 301

  We have a lot of work to do in the next week. And if this framework 
succeeds, we will still have a lot of work to do. Unless the Japanese 
Government fulfills its commitment to deregulation and economic reform 
nationwide, we will have a long, difficult task of sector-by-sector 
market opening ahead. But it is clear to me that we would not have 
gotten even this far without the market-opening leverage Super 301 has 
provided the administration over the past months.
  This builds on a strong previous record of success compiled in 1989 
and 1990, when the United States had a statutory Super 301 process 
under the 1988 Trade Act. In that period, Super 301 helped open the 
Japanese Government market for United States supercomputers and 
satellites, and cut tariffs on processed wood products. The simple 
prospect of identification under Super 301 convinced several of our 
trading partners, such as Korea and Taiwan, to conclude major market 
opening agreements with the United States.
  Super 301 is a tough and successful trade tool. By setting finite 
periods for negotiations to eliminate foreign trade barriers; backing 
up those talks with the possibility of trade sanctions; and holding out 
countries with blatant market barriers up to the world as unfair 
traders, Super 301 gets results.
  And we can see those results in higher exports and more jobs. The 
most negative recent evaluation of Super 301, in fact, concludes that 
Super 301 has raised American exports by $4 to $5 billion a year, thus 
creating about 80,000 high-paying export jobs.
  The study called that relatively insignificant. But I can guarantee 
you, the mill workers who now hold some of those jobs do not find it 
insignificant at all. That would be the last word they use.


               super 301 should be part of the gatt bill

  This record of success is why it is so important to extend Super 301 
for 5 years as part of the GATT implementing bill. Statutorily 
extending Super 301 would send a strong message to the rest of the 
world--especially Japan--that both the U.S. Congress and the 
Administration is serious about market opening. It would also make sure 
future Administrations continue their commitment to open markets around 
the world for U.S. companies and U.S. products.
  Last month, the Senate Finance Committee overwhelmingly passed an 
amendment that I cosponsored with Senators Danforth, Daschle, and 
Riegle, which would reinstall Super 301 for 5 years. Our amendment 
parallels the language we passed in the 1988 Trade Act. It requires the 
U.S. government to continue its practice of annually naming the worst 
obstacles to free trade. Countries would be given 180 days to negotiate 
the removal of their trade barriers or face possible retaliation.
  Including Super 301 in the implementing bill will be especially 
important for the United States in the new post-Uruguay round trading 
system. Under Super 301, the United States will be able to identify key 
violations of our new GATT rights and initiate WTO dispute settlement 
to redress those rights. Super 301 will help make sure that 
improvements in the dispute settlement procedures result in the most 
possible benefit to our country's citizens and companies.


                               conclusion

  We will see the final GATT bill within the next week. I strongly 
believe Super 301 should be part of it. And I believe the United States 
should stand by its position on the framework talks. We do not ask 
anything from Japan beyond fairness, reciprocity, and open markets. We 
have met the commitments we made to Japan on our side of the framework. 
It is time for Japan to do the same.

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