[Congressional Record Volume 142, Number 138 (Monday, September 30, 1996)]
[Senate]
[Pages S12025-S12026]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                UNITED STATES-JAPAN INSURANCE AGREEMENT

 Mr. MURKOWSKI. Mr. President, today I would like to call to 
this Chamber's attention the continuing failure of the Government of 
Japan to honor the United States-Japan Insurance Agreement. My 
colleagues will recall that I offered a resolution on this issue on 
July 25 during our consideration of the foreign operations 
appropriations bill. That resolution was adopted unanimously by the 
Senate.
  It way my hope at the time that the Government of Japan would soon 
begin to implement the obligations it undertook in the insurance 
agreement signed in 1994. Regrettably, not only has Japan not fulfilled 
its obligation to open its insurance market, as called for under the 
agreement, it is now poised to commit a grave violation of it. Such a 
violation would undermine Japanese credibility and could cost American 
companies millions of dollars of hard earned business. Rather than 
leading to a more open market, this agreement and Japan's new insurance 
business law, are being implemented by the Ministry of Finance in ways 
that could lead to substantially reduced American market share.
  Our well-respected Ambassador to Japan, Walter Mondale, told the 
National Press Club earlier this month that it appears possible that 
the Ministry of Finance [MOF] ``is going to permit these huge insurance 
companies to develop subsidiaries to go into the third sector and swamp 
the third sector with the army of insurance agents they have, without 
opening the primary sector. . . . And I think many of [the foreign 
insurance companies] would be driven out.'' For the benefit of those 
Members unfamiliar with the insurance market, the so-called ``third 
sector'' includes such niche products as personal accident and long-
term disability insurance, and it is the only sector where foreign 
firms currently can compete.
  Since Ambassador Mondale made that statement, the possibility of a 
violation has grown. Just last week USTR met again with the MOF to take 
stock of our respective positions. What this meant in fact was the 
Japanese Government withdrew--in response to domestic industry 
pressure--all the concessions offered at earlier negotiations in 
Vancouver.
  Rather than making progress, the negotiations are back to where they 
had been in March and April. And I believe we are now at a brink. 
Ambassador

[[Page S12026]]

Barshesfsky has said publicly that if the MOF allows entry into the so-
called ``third sector,'' or in any other way prejudices the U.S. 
position, we will take appropriate actions.
  Mr. President, I call on my colleagues today to support Ambassador 
Barshesfsky in her negotiations. We should do so unanimously. Japan 
must understand that the Congress' seriousness of resolve on this 
matter is no less than that of USTR.
  Japan must honor its agreements. This may be a complicated issue, but 
it comes down to a simple matter--will Japan live up to its word. As 
Ambassador Mondale has said, ``We have an agreement and that must mean 
something.''
  Mr. President, we have reached a day of reckoning. The Ministry of 
Finance must decide if it will permit violations of the agreement. If, 
on the other hand, the MOF does not permit violations, cooler heads may 
yet prevail.
  Last week, a U.S. official said, ``In its action on October 1, the 
Japanese government should not take action which prejudices the 
negotiations, which invalidates the U.S. position or unilaterally 
adopts the Japanese position.'' I agree. The proper and appropriate 
action by the MOF at this time would be a continuation of the freeze 
which has prevailed for a number of months. That is what we expect from 
the MOF, and nothing less. I hope our friends in Japan do not 
miscalculate, but if they do, we must leave no doubt that they have 
made a mistake.

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