[Public Papers of the Presidents of the United States: George H. W. Bush (1992, Book I)]
[January 9, 1992]
[Pages 53-57]
[From the U.S. Government Publishing Office www.gpo.gov]



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Text of Remarks at the Japanese Welcoming Committee Luncheon in Tokyo
January 9, 1992

    Thank you, Prime Minister Kaifu. Of course, I want to start my 
remarks by extending to all of you the President's apologies for not 
being present at lunch today. This meeting was to be a high point of his 
trip. I'm sure you all know as well of his great respect and warm 
feelings for former Prime Minister Kaifu. And it is with real regret 
that he was not able to be here at lunchtime today.
    As Prime Minister Kaifu said, the President is fine. I talked to his 
doctor just an hour ago. The doctor is a former classmate of mine at 
college. I know him very well, so I can assure you the information is 
correct. The doctor has told the President in very strict terms to rest 
this morning. He will be resuming his schedule later today and, I'm 
sure, will express to all of you his deep regret at not being able to 
join you at this wonderful gathering.
    Mr. Prime Minister, members of the Diet, distinguished guests, it is 
a deep honor to be here today. President Bush has asked me to make his 
remarks to you this afternoon. Although there have been minor 
grammatical changes in pronouns, this is the President's speech. These 
are his words.
    We come to Japan at the culmination of a long and productive 
journey. Today we stand at a turning point in history. The cold war is 
over. The Soviet Union has vanished and with it the delusions of 
communism. Centuries-old enemies in the Middle East are tempering 
ancient hatreds in pursuit of peace. Freedom's phoenix is rising from 
the ashes of tyranny in nations from Latin America to Eastern Europe and 
from Cambodia to Mongolia.
    Freedom's rebirth was painful, its triumphs inscribed in blood, its 
truce seared by the fires of war and sacrifice. This century has taught 
us two crucial lessons: First, that isolationism and protectionism lead 
to war and deprivation; and second, that political engagement and open 
trade lead to peace and prosperity.
    These last few years we again learned of the power of ideas. 
Technologies that transmit ideas in the blink of an eye carry the human 
spirit over barricades and through barbed wire. They hurdle walls 
designed to hold back the truth. We live in a world transformed, 
shrunken by swift travel and instant communication, drawn closer by 
common interests and ambitions, propelled forward by people's 
imaginations and dreams.
    As leaders of this transforming world, the United States and Japan 
must help build a new international order based on the rule of law, 
respect for human rights, and political and economic liberty. We must 
shape a world enriched by open trade and robust competition, a world 
that will create a better life for people of all nations.
    The United States lies between two great oceans, the Atlantic and 
the Pacific. We are a nation of the Atlantic by birth, but our ties to 
the Asia-Pacific region deepen daily. Our two-way trade is now $310 
billion annually, one-third larger than that with Europe. Our prosperity 
and yours are indivisible. American businesses cannot flourish in Asia 
unless the economies of Asia thrive and grow.
    At the same time, Japan's growth needs American markets open and 
growing. Since 1975, the number of Americans of Asian origin has nearly 
quadrupled. What happens here is very important to us. And at the core 
of our continuing Asian engagement stands our alliance with Japan.
    At each stop during his visit to the region, the President has 
stressed the challenges we must face, addressing the new security 
requirements of our transforming world, promoting democracy, and 
generating world economic growth and prosperity. Let me expand upon that 
by focusing on the special relationship that the United States enjoys 
with Japan. Rarely in history have two nations with such different and 
differing historic cultural roots developed such an extraordinary 
relationship. Our people are bound by shared security, by democracy,

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and by our deep economic ties.
    There are those who doubt the future of this relationship. There are 
reasons for tension. Here in Japan you have a saying, ``Some rain must 
fall to prepare the ground for building.'' We can all see that without 
progress we may be in for some rough weather. And I must be frank in 
saying that there are problems in our economic relationship. Speaking 
not only for the United States but for many developed countries, Japan's 
trade surplus is too high, and its market access too restricted.
    President Bush has come to Japan as a friend, seeking solutions to 
these concerns, believing that the expansion of free and fair trade will 
do nothing but strengthen our relationship. We in the United States are 
confident about our capacity for partnership. Our areas of common 
interest are too important. Consider the four key areas of our joint 
relationship.
    First, the U.S.-Japan security alliance. We enjoy a strong security 
bond with Japan. Japan's generous host-nation support for U.S. forces 
stationed here is an important demonstration of shared responsibilities. 
Let us make the most efficient use of our defense resources by building 
greater coordination of our military forces and by promoting the two-way 
flow of defense technology. Such cooperation enhances our security and 
builds even stronger political ties between us.
    The Gulf crisis sparked spirited debate here about Japan's global 
role. That makes it all the more profound that no nation outside the 
Gulf region provided more generous financial support than did Japan. The 
American people and peace-loving people everywhere appreciate deeply 
your contribution, Japan's contribution, to the United Nations coalition 
in the Gulf.
    Even before the Gulf war, but especially in its aftermath, Japan has 
continued to define its growing role in world affairs. An increasingly 
active, engaged, and responsible Japan is critical to a forward-looking 
post-cold-war community. That community will not exist unless its 
leading powers lead.
    This brings us to the second area of our relationship, our foreign 
policy cooperation. We must fulfill the bright promise of our global 
partnership. Together, we produce 40 percent of the world's gross 
national product. We contribute together 40 percent of all bilateral 
aid. We have the ability to marshal unrivaled resources to build a 
better future if our foreign policies are well coordinated.
    America has a responsibility here, but it is a responsibility we 
share with Japan. The upcoming conference on assistance to the nations 
of the former U.S.S.R., now the Commonwealth of Independent States, is a 
timely example of such foreign policy coordination.
    The collapse of the Soviet Union has also spurred questions within 
Japan about the durability of U.S.-Japan alliance. For decades, this 
alliance has stood as the bulwark of American-Japanese international 
cooperation. It is today every bit the linchpin of regional stability 
and bilateral cooperation that wise men foresaw years ago.
    The demise of the Soviet Union may confront us both with ominous 
dangers, but it also presents us an historic opportunity. The leadership 
Japan and other Asian nations can provide to help transform a once-
totalitarian empire into market-oriented and democratic states helps 
guarantee the future peace and stability of our world.
    Let me add that with the changes in the former Soviet Union, the 
United States sees no reason why Japan should not regain the Northern 
Territories. We share this goal, and in whatever way we can, we will 
help you attain it.
    We cannot imagine meeting the foreign policy challenges of our time 
without Japan as a partner. That is why today Prime Minister Miyazawa 
and President Bush will issue a document called the Tokyo Declaration, 
setting out the basic principles and major challenges of our global 
partnership. By putting into words the fundamentals of the two great 
partners, we hope to guide the way through the turbulent waters ahead. 
We must be clear about our responsibilities and our requirements, for 
our renewed alliance will do much to define the shape of the post-cold-
war world.
    Third, we must deepen our understanding of each other. For all of 
our interaction politically and economically, our peoples know too 
little of the other's history, tradi-

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tions, and language. We welcome the work of the Center for Global 
Partnership in expanding exchanges and interactions, intellectual, 
scientific, and cultural. Thanks to such programs, our two nations will 
have an ever-increasing number of people who have lived in each other's 
country, speak each other's language, and understand more fully how 
important we are to each other.
    Although more than 200,000 Asian students now study in American 
colleges and universities, more Americans must immerse themselves in 
Asian societies and cultures.
    As the exchange of free people and ideas flows between our nations 
and as the cold war ends in victory for our cause, our economic 
relations have taken center stage. This brings me to the fourth and most 
important point.
    If we are to expand our economic ties, we must face up to the 
economic tensions that threaten our relations. We must reduce those 
tensions now by opening markets and by eliminating barriers to trade and 
investment. We are now each other's largest overseas trading partner. 
Japan will sell about $90 billion worth of goods and services to the 
United States this year. We will sell nearly $50 billion to Japan.
    Our economies, the world's two largest and most technologically 
advanced, have become irreversibly intertwined. Closing markets and 
restricting trade have previously brought the world to the brink of 
economic disorder. Isolation and protectionism must remain the sleeping 
ghosts of the past, not the waking nightmares of the future. We must 
reject these failed notions in the sure knowledge that expanding markets 
mean expanding jobs and increasing prosperity for both our countries.
    We must ensure a continued strong two-way economic relationship 
between Japan and the United States, with markets more open to new goods 
and services, manufacturers more open to new competitive ideas, the 
financial services industry competing on a fair basis, and an equitable 
flow of technology on both sides.
    Our two countries share a special responsibility to strengthen the 
world economy. Yesterday the President and the Prime Minister announced 
a strategy for world growth which commits both our countries to domestic 
policies to stimulate growth. Expanded domestic demand in Japan 
translates into additional exports to Japan for American products and 
jobs at home. And we are seeking broad support for growth policies among 
other industrialized countries as well.
    Many American businesses learned during the past decade that the old 
ways no longer work in our changing international marketplace. Our 
companies have cut costs, improved quality, and championed innovation. 
As a result, our products sell in markets everywhere they have access. 
And candidly, such access is still limited in Japan.
    We must reduce the trade imbalance between us, not through managed 
trade, through gimmicks or artificial devices, but simply by gaining 
true and welcome access to your markets. We want to create fair 
opportunities for traders and investors, both buyers and sellers, by 
removing the barriers both seen and unseen to open and equitable trade.
    American business doesn't need a handout and doesn't want one. Some 
say that perhaps it is time to help the United States out of a sense of 
pity or compassion. Let me tell you, we are looking for no such help. 
What the United States wants from Japan is for Japan to recognize its 
international economic responsibility for its own sake and for the sake 
of the global marketplace upon which Japan depends. When we express 
appreciation to those who seek to open Japanese markets, it is not 
because we need a handout but because we know an open Japan is good for 
us all.
    Our companies simply expect the chance to compete fairly in markets 
around the world. Our Government remains committed to open markets, and 
we will further reduce our own trade barriers as our friends dismantle 
their own.
    Our two countries have embarked on a unique experiment in economic 
independence called the Structural Impediments Initiative. In this 
effort, each side pinpoints the other's barriers to competitiveness, and 
each commits to reduce them. We both must reinvigorate this commitment 
to market access, whether for high quality American products or quality 
American

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services. The beneficiaries will be the workers and consumers on both 
sides of the Pacific.
    Improving our economic relations includes further opening your 
markets. It means greater openness in many sectors of the Japanese 
economy still biased against outside investment. These practices hurt 
American companies, but they also hurt Japanese consumers.
    Americans want the same things you want, a better quality of life 
for themselves and their families. Americans never say, ``Please raise 
our prices.'' And I'll bet the Japanese don't either. Every worker is 
also a consumer, and economic competition brings them great choices and 
lower prices. In fact, the Toys-R-Us store that the President visited in 
Kyoto offers prices up to 30 percent lower than its Japanese 
competition. The stunning success of the consumers' response to its 
sister store north of Tokyo tells the same story. That's good for us, 
and it's good for you.
    U.S. export business is stronger than ever. We sold more exports 
last year than ever before. We enjoy a trade surplus with Europe. About 
one-third of our economic growth between 1985 and 1990 was attributable 
to merchandise exports. To Japan, our manufactured exports are up 70 
percent since 1987, a $20 billion increase that represents almost half a 
million jobs.
    Still the overall trade deficit with Japan remains large. And I 
might add, its persistence is truly the exception among our trading 
partners. Let me say this: We have waited a long time, but now the time 
has come for equal access. Fairplay is in both our interests.
    As you know, the United States and Japan also face the urgent 
challenge of leading the way to a successful conclusion of the Uruguay 
round. Because of the benefits we each derive from free trade, Japan and 
the United States bear a special responsibility for tackling the 
remaining difficult issues quickly and decisively. The success of the 
round depends on bold, farsighted leadership. We must lift our gaze to 
the glimmering horizon of broader prosperity and not worry over the 
stones in our immediate path.
    Yes, all of us have problems with portions of the so-called Dunkel 
draft, but we cannot let the progress it represents slip through our 
fingers. If we allow that draft to be picked apart by special interests, 
who wins? Not our people, not yours, not the less developed nations. No 
one. The GATT round is the world's best hope for expanding trade for all 
countries.
    Men and women from all walks of life and all parts of America 
constantly tell the President this: They believe very, very strongly in 
creating a level playing field for everyone. We want all our trading 
partners to give the United States companies the same kind of 
opportunities that their firms enjoy in the United States. That's not 
just free trade; that's fair trade. And it creates a basis for even 
greater freedom and greater prosperity for all.
    Many of our Japanese friends argue that the United States must 
improve its competitiveness, and they're right. We recognize that some 
of our bilateral trade imbalance stems from causes other than restricted 
market access. One reason for Japan's competitiveness is because Japan 
has saved and invested at a rate double that of the United States. You 
have focused on applied research and development and new manufacturing 
technologies. Your companies have established fine quality control 
systems. You have developed a highly educated labor force and have taken 
the long view to develop markets abroad.
    There is much for us to learn from you. We are taking steps to boost 
our competitiveness. We can and will increase our rate of savings and 
investment. We will continue to boost our manufacturing's excellence. We 
will reduce the budget deficit. To stimulate innovation, risk, and 
longer term business outlook, the President is pushing for investment 
incentives, R&D credits, and capital gains tax cuts. In America, cutting 
capital gains is politically extremely difficult. It would be easier if 
our politicians saw the positive effect on Japan's competitiveness due 
to low capital gains rates.
    And America must raise its educational standards. Our America 2000 
education strategy will fuel a revolution for better quality schools. 
This is another path to competitiveness. The education achievements of

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Japan and others in the Asia-Pacific region inspire us. That is why 
President Bush has invited the countries of the Pacific Rim to send 
their education ministers to Washington for a conference this spring to 
seek new ways to cooperate and to learn from each other's 
accomplishments.
    With the President today, traveling with him, is a delegation of 
America's top business leaders. They've come to explore new business 
opportunities in all the nations the President has visited. Every one of 
them can tell you that despite the fact that our economy is facing some 
new tough times right now, America still draws upon tremendous 
strengths. Our basic research is the best anywhere. We have many of the 
world's finest universities. American technology remains on the cutting 
edge in many advanced fields such as computers and biotechnology. Our 
society is energetic, creative, and talented. It has the added advantage 
of drawing upon the strengths and insights of many cultures, including 
Japan's.
    The chief executive officers accompanying the President will also 
tell you that they care about American jobs. They care about American 
exports. Obviously, so does the President. We know that the Asian-
Pacific market offers enormous potential to those American businesses 
that will accept the challenge of competition. That same competition has 
propelled Japan toward world leadership. Open markets around the world 
has provided Japan with economic prominence. Japan must now join the 
ranks of world leadership in strengthening free markets and freedom.
    Finally, let me leave with you a message that the President wished 
to give directly to the people of Japan. And I quote:
    The American people are your friends. Friendship must be built upon 
three pillars: fairness, trust, and respect. We expect nothing less, and 
we ask for nothing more. Today marks a turning point for us in many 
ways. Together, we face the next millennium, a new order for the ages, a 
new world of freedom and democracy. We stand as the world's powers with 
the future presenting us with a decision. The United States has made its 
choice against isolationism and in favor of engagement, against 
protectionism and for expanding trade. Today we bid Japan to do the same 
because engagement and open trade are in your best interest.
    Together, let us shape a new and open world, a world of vigorous 
competition and dazzling innovation. Let us build a world of greater 
prosperity and peace than ever before, if not for the sake of ourselves, 
then for the sake of our children. This is the finest legacy that we 
could bequeath to them.
    Thank you very much.

                    Note: Secretary of the Treasury Nicholas F. Brady 
                        delivered the President's remarks at 12:45 p.m. 
                        at the Akasaka Prince Hotel.