    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book I)]
    [January 11, 1995]
    [Pages 33-38]
    [From the U.S. Government Publishing Office www.gpo.gov]

    The President's News Conference With Prime Minister
    Tomiichi Murayama of Japan
    January 11, 1995

        The President. Good afternoon. I am delighted to welcome Prime
    Minister Murayama here for his first official visit. It comes at a very
    important time, a time when we are beginning to mark the 50th
    anniversary of the end of World War II, a time when we must move to
    strengthen the vital partnership between our peoples for the 21st
    century.
        We are starting this year in exactly the right way, working together
    as representatives of two great democratic nations, committed to solving
    the problems we face together. We know America has no more important
    bilateral ties than those with Japan. In a dramatically changing world,
    we look to Japan as an unwavering friend, one devoted, as are we, to
    promoting peace and advancing prosperity.
        Recently, the vitality of our relationship has been illustrated
    again by our cooperation to diffuse the danger of nuclear weapons on the
    Korean Peninsula. Working together with our South Korean allies, we have
    confronted the nuclear threat and stopped it. The agreement we reached
    with North Korea already has frozen their nuclear program in a way that
    is verifiable. North Korea will be giving up control of nuclear
    materials that could be used in bombs. Construction of new and dangerous
    reactors has stopped. Ultimately, this program will be dismantled. And
    all of this is being done, as I said, with strict outside monitoring and
    verification.
        Prime Minister Murayama and I talked about our two countries' roles
    in implementing the North Korean nuclear agreement, including some
    activities each of us will undertake. I want to express my appreciation
    for Japan's strong support for this agreement, including its willingness
    to play a significant financial role. I reaffirmed my intention to Prime
    Minister Murayama that the United States will also continue to play a
    leading role in implementing the agreement.
        This year, the United States and Japan will also work together to
    develop a comprehensive blueprint for liberalizing trade among the
    rapidly growing Asian-Pacific economies. We're confident that during its
    chairmanship of APEC, Japan will show the leadership necessary to chart
    the course and fulfill the goals of the agreements announced in
    Indonesia in November. Free and fair trade in Asia will deliver more
    high-paying jobs for American workers, and those are exactly the jobs
    that will give more Americans a chance to pursue the American dream.
        The Prime Minister and I discussed our bilateral economic
    relationship. Under our framework agreement, I'm pleased to announce
    that this week we reached an accord that will open up Japan's financial
    services sector to American businesses. Over the past 4 months, we have
    also forged agreements to open Japanese Government procurement as well
    as Japan's glass and insurance markets to American companies. These
    agreements must, of course, be fully implemented to ensure that real
    results are achieved, and more remains to be done. But in the last
    calendar year, we have reached 8

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    separate agreements and a total of 14 in the 2 years I have been in
    office.
        Still, Japan's current account surplus is too high, largely because
    it is just coming out of a period of recession. But further progress
    must be made, especially in the areas of autos and auto parts, which
    make up the bulk of our trade deficit with Japan. Negotiations there are
    set to resume soon. I am firmly committed to opening the market in this
    and other areas. We must redouble our efforts to assure further
    progress.
        Finally, let me say that the Prime Minister and I will release today
    the first report detailing the tremendous achievements that have been
    made in a range of joint projects on global issues. In programs that
    address such problems as explosive population growth and AIDS, the
    eradication of polio and the battle against the drug trade, our common
    agenda for cooperation is making great strides in confronting issues
    that know no national boundaries.
        These are just a few of the projects that our nations are working
    together on, and they are proof of a relationship that no one could have
    dreamed of 50 years ago or perhaps even 20 years ago. Today, we have
    every confidence that the extraordinary bonds between Japan and the
    United States will only grow stronger in the years, the decades, and the
    new century to come.
        Mr. Prime Minister.
        Prime Minister Murayama. At the beginning of the year marking the
    50th anniversary of the end of World War II, President Clinton and I
    confirmed the importance of Japan-U.S. relations today, which have been
    built by the peoples of Japan and the United States over 50 years. And
    we agreed to further develop Japan-U.S. relations towards the future.
        I took this opportunity to express my gratitude for the magnanimous
    assistance which the United States had provided Japan after the war.
    Both our Governments share the view that it is important for Japan and
    the United States to firmly maintain the Japan-U.S. security
    arrangements. We reaffirmed that both our countries would further
    advance cooperation for the peace and prosperity of the Asia-Pacific
    region.
        Japan will cooperate with the United States towards the success of
    the APEC meeting in Osaka to be held this autumn. We'll also further
    advance the common agenda which emphasizes the Asia-Pacific region.
    Today the joint report on the common agenda was submitted. During this
    summit meeting, we agreed to add women and development as a new area
    under the common agenda. In my talks with the President, I stressed the
    importance of advancing exchanges between the peoples of our countries
    and cited the exchange of students as a specific example.
        We also exchanged our views on international issues of common
    interest. The Government of Japan strongly supports last year's agreed
    framework between the United States and North Korea. I stated that to
    ensure the success of the light-water reactor project, which directly
    relates to the security and stability of the northeast Asian region,
    including Japan, the Government of Japan intends to play a significant
    financial role in the LWR, or light-water reactor project, under an
    overall project scheme in which the Republic of Korea is expected to
    play the central role.
        As regards the economic aspects, since the end of September last
    year, discussions have been concluded on the flat glass and financial
    sectors, and agreement was reached to resume the automobiles and auto
    parts talks. We commended such progress and confirmed that we would
    continue to seriously engage ourselves in the Japan-U.S. framework
    talks.
        During this pivotal year, I'm resolved to make efforts to advance
    the Japan-U.S. creative partnership together with President Clinton,
    building on today's meetings as a good starting point. Furthermore, I
    look forward to welcoming President Clinton to Japan as a state guest
    this autumn.
        Thank you.
        The President. Thank you. We'll alternate between the American and
    the Japanese press. Terry [Terence Hunt, Associated Press], go ahead.

    Japan-U.S. Trade

        Q. Mr. President, Japan's trade surplus is running at more than $60
    billion. Last year at this time, you said that you'd rather admit
    failure than accept an empty agreement or try to paper over differences.
    Where do things stand now? Do you think that you've made any
    breakthrough with these agreements that you've mentioned, or are things
    pretty much about where they are?
        The President. I do. I think I would point out two things. First of
    all, in the last calendar year, we have reached eight agreements. If

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    they're all implemented fully and in good faith, there's going to be a
    timelag between the time those specific market sectors are opened and we
    begin to feel the benefits of it here in the United States.
        The second point I would make is that at any given time, the trade
    relationships between two countries will depend upon the state of the
    economies in those two countries. We had the good fortune of coming out
    of our recession more quickly than did Japan. Our growth rate has been
    higher for the last 2 years. Theirs is now picking up again. I would
    expect it would be very strong.
        One thing I can say to you is that imports and exports increased
    equally in the last 2 years, that is, by the same percentage. It was an
    11 percent increase--I mean, excuse me, in this last year there was an
    11 percent increase in imports from Japan and an 11 percent increase in
    exports to Japan. If we can implement these agreements that we have
    reached and if we see the Japanese economic growth rate coming up to
    about the American rate, then I think you will see a tightening of that
    trade deficit.
        The final point I would like to make is that it will never be in
    rough parity unless we continue to strengthen and discipline our own
    economy and, most important, unless we make some progress on autos and
    auto parts, because that's about 60 percent of the trade deficit. So
    that's a part of our framework agreement. We're about to start the talks
    again there. That's all in the private sector in Japan, but that's
    what's going to be necessary to finally get this relationship where it
    ought to be.
        But I don't think you can overread the figures from this year
    because of the impact of the recession and because of the time delay in
    implementing the eight agreements we made in '94 and their impact. We're
    clearly making progress, but not enough, and we have to move on auto
    parts and autos.

    World War II Commemorations

        Q. Mr. President, how are you going to commemorate the 50th
    anniversary of the end of the war? Did you, or are you going to invite
    the Prime Minister to some ceremony which will be held later this year?
        The President. Well, there will be a number of commemorations, as
    you probably know, throughout the Pacific. But we have not yet decided
    precisely what I will do and how we will do it.
        Let me say this: I know there's a debate going on in Japan about
    this whole issue now and how it should be handled. I can only say that
    the last three leaders of Japan have expressed in the sincerest terms
    their regret about the war. We have had a remarkable relationship, a
    partnership, and a growing friendship with Japan. And I would hope that
    we could mark this year by saying this is something that civilized
    nations can never permit to occur again. But looking toward the future
    and what our responsibilities and what our opportunities are in the
    future by working together to change the world for the better, that is
    what I think we should do. And I hope that all these areas of
    cooperation that the Prime Minister mentioned that will be in the report
    we're mentioning today, we're releasing today will be at the forefront
    of what people in the world think about the United States and Japan in
    the years ahead.

    Mexico

        Q. Can you tell us something more about what the United States is
    doing to help stabilize the Mexican economy, what effect the crisis
    there is having on the U.S. economy or what effect it may have? And can
    you answer people who are beginning to say that this proves that getting
    involved, further involved with Mexico and Latin America in treaties
    like NAFTA may have been a mistake?
        The President. Let me--there's two separate questions; let me answer
    them both. First of all, let me say again I have confidence in the long-
    term future of Mexico. What we have now is a short-term liquidity
    crisis. There was inevitably going to be some correction in the Mexican
    currency value because they had run a rather high budget deficit. But
    they have had stable political leadership, a good economic direction, a
    commitment to the right kind of future. And they have shown real
    discipline. President Zedillo's latest moves will require genuine
    sacrifice from the Mexican people.
        And so the United States is committed to doing what we can to help
    Mexico through what I believe is and should be a short-term crisis. We
    have considered a number of options. We have consulted with people in
    our Government and, obviously, among the leadership of Congress. I spoke
    with President Zedillo myself last

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    evening again. And we are watching this closely and may have more to say
    specifically in the days ahead.
        But I think it's--this is very important to us. Mexico is our
    neighbor and has been a constructive partner, has tried to work with us
    on issues ranging from the drug trade to immigration, as well as on our
    economic issues. Mexico is sort of a bellwether for the rest of Latin
    America and developing countries throughout the world. So we have to
    work on the confidence and the liquidity crisis. And I think that it's
    in our interest to do so.
        Now, let me say on the second question, the people who were opposed
    to NAFTA made exactly the reverse argument. What they said was that the
    Americans would be taken to the cleaners, and Mexico would get rich off
    NAFTA, and America would be greatly disadvantaged. As it turned out,
    because of our high levels of productivity, the recovery of our economy,
    and the particular needs of the Mexican economy and the Mexican people
    now, we did quite well under NAFTA for the last 2 years.
        And what has happened is something that no one really foresaw. But I
    would think this should reaffirm our determination to try to have both
    democracy and progress, not only in Mexico but throughout Latin America.
    And for those who can remember what it was like for the United States
    when Latin America was in depression and when Latin America did not have
    democratic governments, I think there's no question that it is better
    for us to have the sort of atmosphere and the sort of reality we saw at
    the Summit of the Americas. So I just disagree with those who make the
    second assertion.
        Anyone have a question for the Prime Minister?
        Q. Mr. President, following Mexico, I want to know if you can tell
    us the amount of the increase in the credit facility you're going to
    announce and when, and second, if you plan to keep your support for the
    candidacy of President Salinas for the WTO over this international
    criticism for his role in this grand monetary crisis in Mexico?
        The President. The answer to the first question is no, I can't give
    you a specific answer. The answer to the second question is yes, I still
    support President Salinas.
        Is there a Japanese journalist who has a question, a Japanese
    journalist, a question for the Prime Minister?

    North Korea

        Q. [Inaudible]--support for the light-water reactor project, the
    President mentioned there was a strong support by Japan, and the Prime
    Minister mentioned Japan intends to play a significant financial role. I
    wonder what specific commitment you gave to the President? Also, since
    you've mentioned Japan intends to play a significant financial role, I
    wonder if there was any specific ratio indicated, any number given to
    that financial role? And now there is some criticism with regard to the
    rather ambiguous solution reached in that agreed framework, and I wonder
    if there was any comment on that?
        Prime Minister Murayama. Well, with regard to the resolution of the
    North Korean nuclear issue, I would like to say that this issue has a
    bearing not just on Japan and the neighboring areas but for Asia-Pacific
    region as a whole. And we've watched very carefully the progress in the
    U.S.-North Korean talks. And thanks to the tenacious efforts made by the
    United States, agreement has been reached, and we appreciate that very
    highly.
        In relation to that nuclear issue, we're now discussing the light-
    water reactor project. As I mentioned earlier, the Government of Japan
    intends to play a significant financial role in relation to that LWR
    project. That is what I told the President. However, we have not decided
    on the specifics of that financial role. For example, we have not
    commented on how much that financial role is going to be. It is not
    merely that the Government of Japan intends to cooperate; rather we take
    this issue as a matter of--for itself as well. And I think it's with
    that very engaged attitude that we have to address the problem.
        The President. Rita [Rita Braver, CBS News]. We'll take, I think,
    one more each.

    Minimum Wage

        Q. Mr. President, your aides have said that you are definitely
    considering a raise in the minimum wage in this country. Have you signed
    off on that? What's the area in which you're talking about raising it,
    and when do you think you'll have a final decision? And are you worried
    about Republican opposition already building?
        The President. Well, I have not--let me say, number one, I haven't
    received a recommendation yet on that from my economic advisers. So I
    don't want to comment on it until I do.

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        I think we should look at three things, basically, in making this
    decision. First of all, the minimum wage is at a 20-year low. Second,
    inflation is at a 30-year low. And then we need to analyze whether--so
    there's an argument--and thirdly, the number one mission of the country
    in this recovery is to raise incomes.
        Now, you can argue, well, there are a lot of people on the minimum
    wage who are actually young people who live at home with parents, and
    they're not low-income people, and they don't need it. You can argue,
    there are also a lot of people who are contributing to the support of
    their children.
        Two years ago we attempted to do something really significant about
    this through the dramatic increase of the earned-income tax credit,
    which was made refundable, so that today working families in America
    with an income averaging $25,000, $26,000 a year or less will get an
    average of a $1,000-a-year tax cut below what their tax rates were
    before I took office. For those on the low end of the wage scale, that
    was in part designed to offset the fact that the minimum wage had fallen
    so far behind inflation and had not kept up with wage growth. There are
    those who argue that the structure of the American economy has changed
    so much that this would be burdensome. That's what my economic advisers
    are evaluating now. They will give me a recommendation.
        But my goal, the reason I focused on the earned-income tax credit
    and the reason I've said we ought to pass the middle class bill of
    rights, is that we have to raise incomes. Ultimately, the way to raise
    incomes in America is to increase the skills of the American work force,
    which is why the most important thing we can do, more than anything
    else, is to pass the bill of rights: the education tax deduction, the
    IRA with education withdrawals, and the training voucher program I've
    proposed to let all the training programs be collapsed and let American
    workers have up to $2,600 a year in just cash money to get training.
    That will raise their incomes.
        But I will seriously consider this recommendation when I get it. I
    have simply not received it yet.
        Q. Any idea what the--[inaudible]--rate would be?

    Japan-U.S. Security Arrangements

        Q. On Japan-U.S. security arrangements, I understand that you
    reaffirmed the importance. Now, with regard to host-nation support, I
    wonder how Japan intends to address that issue? What did you tell the
    President? And also, with regard to the future, was there any discussion
    of the possibility of cooperation between the two countries on PKO under
    the United Nations?
        Prime Minister Murayama. The necessity, the need for Japan-U.S.
    security arrangements was discussed, and we see eye-to-eye with each
    other completely. Although the cold war structure has disappeared,
    regionally there still remain numerous unresolved issues. And we believe
    we should look at the Japan-U.S. security arrangements not simply as
    something for Japan and the United States. The role that the setup plays
    for the security and stability of the Asia-Pacific region as a whole is
    very significant. And therefore, we have to continue to maintain that
    relationship.
        And we should take that security relationship or security setup as
    the pivot and not simply build on that in the security area but also in
    the other areas as well. And I think that is very important. And we
    would like to, therefore, continue to strengthen that relationship from
    that vantage point.
        Your second question was on peacekeeping operations. As you know,
    Japan is a country that has a constitution, a peace constitution, and
    therefore we cannot provide cooperation that involves the use of arms.
    However, we have already sent our self-defense forces to Rwanda and
    other parts of the world for humanitarian purposes. And for such
    humanitarian purposes and within the extent that the Japanese
    Constitution will allow, we have been saying consistently that Japan is
    willing to cooperate with the world. And I think there is full
    understanding between the two countries on that.

    Japan-U.S. Trade

        The President. Let me say that the Prime Minister has to leave. And
    before he does, I want to make a presentation. Yesterday for the first
    time, the Japanese market was opened to apples from the United States.
    And as the Prime Minister left, he was telling me the marketplaces were
    being filled with the apples, but he didn't have a chance to get any.
    Now, shortly, the

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    American market will be open to apples from Japan. And we're looking
    forward to them. I personally like them a great deal. But since the
    Prime Minister left before the markets opened, I want to give him a
    basket of Washington State apples to take home to Japan with him.
    [Laughter] This is the symbol of our progress.
        Prime Minister Murayama. The Japanese people are enjoying the taste
    of American apples, and I hope that American people will enjoy the taste
    of Japanese apples.
        Thank you very much.

    Note: The President's 84th news conference began at 2:05 p.m. in the
    Grand Foyer at the White House. Prime Minister Murayama spoke in
    Japanese, and his remarks were translated by an interpreter.