[Congressional Record Volume 144, Number 41 (Thursday, April 2, 1998)]
[Senate]
[Pages S3157-S3158]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  SENATE CONCURRENT RESOLUTION 88--CALLING ON JAPAN TO ESTABLISH AND 
MAINTAIN AN OPEN, COMPETITIVE MARKET FOR CONSUMER PHOTOGRAPHIC FILM AND 
                                 PAPER

  Mr. D'AMATO (for himself, Mr. Moynihan, Mr. Ashcroft, and Mr. 
Bingaman) submitted the following concurrent resolution; which was 
referred to the Committee on Finance:

                            S. Con. Res. 88

         
       Whereas the current financial crisis in Asia underscores 
     the fact that the health of the international economic system 
     depends on open, competitive markets;
       Whereas structural reform in Japan is critical to the 
     resolution of the Asian financial crisis;
       Whereas for many years the United States Trade 
     Representative has reported to Congress in the National Trade 
     Estimate on numerous barriers to entering and operating in 
     the Japanese market;
       Whereas Japan's restrictive policies deny opportunities to 
     United States companies and their workers seeking access to 
     Japanese markets;
       Whereas the United States Trade Representative has engaged 
     over the last several years in an intensive review of the 
     Japanese distribution system;
       Whereas on June 16, 1996, the United States Trade 
     Representative found that the Government of Japan created and 
     tolerated a market structure that impedes United States 
     exports of consumer photographic film and paper;
       Whereas the European Union has sought to remove these same 
     barriers to distribution that restrain European exports to 
     Japan;
       Whereas it is important that United States companies and 
     workers not be disadvantaged by other countries following 
     Japan's model of protecting its market through a closed 
     distribution system and other market access barriers;
       Whereas a recent panel of the World Trade Organization 
     failed to address the closed distribution system and market 
     access barriers in Japan;
       Whereas the Government of Japan has consistently stated 
     that it is committed to deregulation, transparency, 
     nondiscrimination, and open distribution systems accompanied 
     by vigorous enforcement of competition laws;
       Whereas the Government of Japan stated in recent 
     proceedings of the World Trade Organization on consumer 
     photographic film that it is committed to promote 
     distribution policies that make the Japanese market more open 
     to imports and to actively discourage restrictive business 
     practices; and
       Whereas fulfilling these public statements would benefit 
     both United States trade and Japanese consumers, 
     significantly raising the standard of living in Japan: Now, 
     therefore, be it
       Resolved by the Senate (the House of Representatives 
     concurring), That the Congress--
       (1) calls upon the Government of Japan to live up to the 
     standards it has set for open competitive markets;
       (2) calls upon the Government of Japan to fully implement 
     the representations that it made to a dispute settlement 
     panel of the World Trade Organization regarding deregulation, 
     transparency, nondiscrimination, open distribution systems, 
     and vigorous enforcement of competition laws with respect to 
     consumer photographic film and paper as well as other 
     sectors, such as autos and auto parts, glass, and 
     telecommunications, that face similar market access barriers 
     in Japan;
       (3) urges the President, the United States Trade 
     Representative, and other appropriate officers of the 
     executive branch to exercise fully existing authority to 
     achieve these objectives; and
       (4) requests the President to report to Congress, not later 
     than July 15, 1998, and not less frequently than every six 
     months thereafter, regarding progress in eliminating market 
     restrictions in Japan for consumer photographic film and 
     paper.
  Mr. D'AMATO. Mr. President, the current financial crisis in Asia 
underscores the need for open, competitive markets, free from 
manipulation. Clearly, industrial policy does not work. Managed trade 
and managed commerce is a failure. It simply does not work. Mr. 
President, we have said it all along--when you manipulate trade and 
erect barriers to open and free trade, the consumer gets hurt.
  Mr. President, today we are submitting a resolution which is aimed at 
forcing Japan to put their money where their mouth is. This Resolution 
makes it clear that Japan must fulfill its publicly stated commitments 
to open its markets for photographic film and paper, and other sectors 
facing market access barriers. The bureaucrats in Japan should be on 
notice that the U.S. Congress will not tolerate their intervention into 
the free market. The United States maintains free and open markets in 
every sector of the economy. Americans should expect nothing less of 
any of our trading partners.
  Plain and simple, Mr. President, the Japanese Government has allowed 
Fuji to use Japan's lax anti-trust laws and

[[Page S3158]]

closed-market system to erect barriers to free and open competition. 
The Japanese government, however, maintains that this is not true and 
that their markets are open and free. This Resolution will simply 
encourage the Japanese government to demonstrate their openness.
  The Government of Japan has said publicly that they did not build, 
support, and tolerate a market structure that thwarts foreign 
competition, and in which exclusionary business practices are 
commonplace. This Resolution simply allows the Japanese government to 
demonstrate their resolve to open, free and fair trade.
  Mr. MOYNIHAN. Mr. President, I wish to associate myself fully with 
the remarks of my distinguished colleague from New York. Kodak has 
compiled volumes of evidence, based on more than 100 years of 
experience in the Japanese market, that clearly document the thicket of 
laws and regulations that have the intent--and the effect--of curbing 
sales of foreign photographic film and paper. Through an elaborate 
system of restrictions on sales and distribution, Japan has succeeded 
in severely limiting market access for foreign film and paper.
  Nearly three years ago, on May 18, 1995, Kodak filed a petition with 
the U.S. Trade Representative under section 301 of the Trade Act of 
1974, urging action on the broad range of trade barriers. After a 
formal investigation, Ambassador Barshefsky found that Japan's 
practices were indeed in violation of our trade laws, and dispute 
settlement proceedings in the World Trade Organization were begun. The 
verdict from the WTO, issued in its final form on January 30, 1998, was 
a great disappointment. But certainly not the end of the argument, nor 
the end of Kodak's attempts to penetrate the Japanese market.
  The resolution that I am pleased to cosponsor today emphatically 
endorses the initiative that Ambassador Barshefsky and Secretary Daley 
unveiled on February 3, 1998, which will put the Government of Japan to 
the test. During the course of the WTO proceedings, as my colleagues 
are aware, the Japanese Government asserted that its market was fully 
open to foreign film and paper. And so our government has proposed that 
we monitor that proposition, by collecting data and examining, every 
six months, the progress that Kodak--and other foreign suppliers--have 
made in competing in the Japanese film and paper market.
  This initiative is worthy of our support, Mr. President, and I urge 
my colleagues to join in supporting this resolution.
  Mr. ASHCROFT. Mr. President, The World Trade Organization (WTO) 
decision this year against the United States' photographic film and 
paper industry sounded an alarm for U.S. companies participating in the 
global arena. Rubber stamping Japanese-style protectionism, the WTO 
left American companies at a troubling disadvantage in Japan and other 
Asian countries that replicate the ``successful'' Japanese model. It is 
troubling that many ailing Asian economies, after being bailed out by 
U.S. tax dollars, are still pursuing protectionist trade practices 
against the very taxpayers that paid their bill.
  In the film case, the WTO found that the Japanese market is open to 
the Eastman Kodak Co., despite the fact that Japan admits that its 
system of trade barriers was designed as a ``defensive measure for the 
substantial advances of Eastman Kodak after import liberalization'' 
under the General Agreement on Tariffs and Trade (GATT). This decision 
flies in the face of the U.S. film industry.
  Equally intolerable is the fact that this Japanese-style 
protectionism is being used to block an array of critical U.S. exports. 
Even though Japan has the second largest flat glass market in the 
world, it has systematically excluded foreign imports through an 
exclusive distribution system in violation of its 1995 Flat Glass 
Agreement with the United States. The U.S. also has a ``market 
opening'' agreement with Japan on automobiles, but the Administration 
reported just recently that Japan has failed to keep the agreement's 
``key objectives'' and has reversed progress made last year under the 
accord.
  I am deeply alarmed at the danger that the WTO's misconceived ruling 
in this case will have. Japan now has a license from the WTO to shelter 
its domestic film and paper producers from competition. Under the WTO 
ruling, our Asian trading partners will be encouraged to follow in 
Japan's protectionist footsteps by taking two steps back for every one 
step forward in trade liberalization. For instance, China recently 
announced reductions in overall tariff levels from 23 to 17 percent, 
but China has been implementing an automobile industrial policy much 
like Japan's to undercut the gains achieved from tariff reductions.
  It is time to stand up and say, ``No more.'' No more will we ignore 
mercantilist trade policies that block U.S. products and destroy 
American jobs. No more will we allow foreign companies to use their 
illegitimate gains from their closed market to subsidize exports to our 
open market. No more will we accept a playing field for our products 
that is not level. No more, Mr. President.
  As the world's second largest economy, Japan must guarantee the same 
free and open access to its market as Japanese companies enjoy in the 
U.S. market. Without that guarantee, U.S. businesses are put at an 
immediate competitive disadvantage when entering the international 
arena.
  Therefore, Senators D'Amato, Moynihan, Bingaman, and I rise today to 
submit a Sense of the Senate that the U.S. should use all available 
tools against Japan's toleration of a systematic anticompetitive market 
that impedes U.S. exports. We need to be able to reassure American 
companies and the many U.S. workers they employ that we are tough on 
countries that break the rules of free trade.
  We also request the Clinton Administration take swift and aggressive 
action to open Japan's market, not just for film, but also for the U.S. 
industries that repeatedly struggle to address the intricate web of 
Japanese protectionism.
  The Administration must confront Japan's trade barriers forcefully, 
or the competitiveness of U.S. companies in that market will be 
continually undermined. In 1996, the U.S. Trade Representative made a 
finding under Section 301 that Japan's restrictions on Kodak film were 
a burden to U.S. commerce and an impediment to U.S. film exports. 
However, the USTR office stated that using Section 301 to address such 
trade barriers is too aggressive a policy. I strongly disagree.
  When the United States makes trade agreements, the American people 
expect them to be honored. If trade agreements can be violated without 
sanction by the WTO, then our rights must be secured through the use of 
our own law. The only alternative is to accept a new wave of 
protectionism in Japan and other nations.
  I supported the Senate proposal on ``fast track'' authority for the 
President, but if this Administration is unable to ensure that our 
trading partners live up to their promises under agreements already 
negotiated, I see little reason to think that Congress will give fast 
track authority to pursue a new round of agreements. The Administration 
claims to have negotiated 30 separate free trade agreements with Japan, 
but U.S. exporters clearly are being denied the benefits they had 
expected from these agreements. Congress and the American people 
rightfully expect the Administration to ensure a level playing field 
for U.S. companies. The WTO's intolerable ruling in the Kodak film case 
requires you and your colleagues in the Administration to take a more 
activist and aggressive approach to opening Japanese markets across the 
board, before protectionism proliferates throughout Asia.

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