[Congressional Record Volume 145, Number 63 (Tuesday, May 4, 1999)]
[Senate]
[Pages S4722-S4723]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       JAPANESE CAR CARRIER TRADE

 Mr. HOLLINGS. Mr. President, with our trade deficit continuing 
to grow and with Japanese vehicle manufacturers continuing to increase 
exports to the United States, I rise to remind my colleagues that 
competitive U.S. companies continue to be thwarted in their efforts to 
break down the walls of ``kereitsu'' relationships built up over 
decades in Japan. With Prime Minister Obuchi making his first official 
state visit to the United States, I thought it useful to review our 
economic relationship, or lack thereof.

[[Page S4723]]

  As my colleagues know, the Japanese economy has been in a recession 
for quite some time. Unfortunately, it would appear the country has 
sought to export its way out of the problem and to continue to shield 
inefficient domestic companies from international competition. For 
instance, just last week the Commerce Department determined that 
Japanese steel imports were being dumped by margins of up to nearly 
70%. Such actions are not acceptable. As the office of USTR recently 
said,

       [A]s its demand for imports declines and its firms redouble 
     their efforts to sell to healthier markets abroad, the 
     effects of Japan's economic policies will continue to hit the 
     United States. In 1998, the U.S. goods trade deficit with 
     Japan reached $64.1 billion, an increase of $8.4 billion 
     (14.2 percent) from the 1997 level. . . . U.S. merchandise 
     exports to Japan fell to $57.9 billion, a decrease of 11.9 
     percent from the 1997 level. . . . Japan is more dependent on 
     the U.S. market to absorb its exports than it has been for 
     many years. In 1998, the United States bought about 31 
     percent of Japan's exports, the highest level since 1990, and 
     close to the all-time high of 36 percent in 1986.

  It will come as little surprise to Senators who are concerned about 
our steel industry and other sectors that Japan accounted for 
approximately one-fourth of our entire trade deficit in 1998. It is a 
mistake to suppose that such huge amounts of money can continue 
indefinitely to move one way across the exchange with reciprocal 
movement in the other direction blocked. In view of this situation, the 
USTR said in its report: ``The United States attaches top priority to 
opening Japan's markets to U.S. goods and services.'' I trust the 
President will share our government's concerns in his meeting with 
Prime Minister Obuchi, and will urge him to take steps to increase U.S. 
access to the Japanese market.
  I also believe Japan can, and should, take additional steps to 
increase its defense sharing burden. Let me give one example. In the 
early 1990s, Congress and the Department of Defense recognized that 
more needed to be done to augment our strategic sealift capacity. Our 
experience in Desert Storm demonstrated a critical shortage of U.S.-
flagged, U.S.-manned roll-on roll-off strategic sealift vessels. We 
therefore undertook new construction of a fleet of military ships of 
this type. Even with this new construction, however, there will 
continue to be a deficiency of lifting capacity.
  To meet this deficiency, under the leadership of then-Senator Bill 
Cohen, Congress created the National Defense Features program. Under 
the program, U.S. companies have been invited to build vessels equipped 
with special military features for operation in normal commercial 
service but available in times of national emergency.
  Under one proposal, a fleet of refrigerated car carriers would be 
built in the United States for operation in the U.S.-Japan trade. In 
normal commercial service, the vessels would carry vehicles to the 
United States and refrigerated products to Japan. In times of national 
emergency, the vessels would carry tanks, heavy trucks, and other 
military equipment, as well as substantial amounts of live ammunition.
  Unfortunately, notwithstanding support from the Congress and the 
Secretary of Defense, the project has met with no interest or actual 
resistance in Japan. This is particularly disturbing because 
implementation of the project would, at no economic cost to the 
Government of Japan, enhance the mutual security of our two nations. 
Especially at a time when the Government of Japan wishes to play a 
greater role in advancing shared defense objectives, I am disappointed 
that it has not given more serious attention to this proposal.
  I hope the Administration will continue to press the Government of 
Japan to take steps to reduce our trade deficit and enhance our mutual 
security. I also hope the Government of Japan will use the occasion of 
the Prime Minister's state visit to make further commitments to doing 
so.

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