[Weekly Compilation of Presidential Documents Volume 30, Number 6 (Monday, February 14, 1994)]
[Pages 263-270]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
The President's News Conference With Prime Minister Morihiro Hosokawa of 
Japan

February 11, 1994

    The President. Good afternoon. It's a pleasure to welcome Prime 
Minister Hosokawa to the White House. The Prime Minister and I met last 
in Seattle at the APEC conference. Our dialog there was based on a new 
honesty and respect that continued in our talks today.
    Both of us were elected on a mandate for change, and the Prime 
Minister has shown real courage and commitment to making change occur by 
advocating and securing political reforms, by opening Japan's 
construction and rice markets, and by seeking to deregulate Japan's 
economy. He also ushered through a tax cut that is a step towards 
spurring growth. And I know the Prime Minister proposed an even larger 
budget stimulus. I commend all these steps which can move Japan toward 
greater openness.
    The United States and Japan have a long, deep, and rich 
relationship. No relationship in the world is more important today. Our 
security alliance, which is stronger than ever, is essential to the 
Asian Pacific and elsewhere. Today we discussed our shared interest in 
the Asian Pacific and its stability, including developments in Russia, 
China, and elsewhere. And I look forward to continuing this discussion 
this summer at the G-7 summit in Naples.
    Our shared interests are nowhere clearer than on the Korean 
Peninsula. North Korea's nuclear program poses a serious threat to 
regional stability and to international nonproliferation efforts. We 
agreed to continue our close cooperation in pursuing a nonnuclear Korean 
Peninsula.
    Our nations today have also embraced a common agenda for cooperation 
on global is- 

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sues such as population, transportation technology, and the environment. 
It includes a $12 billion joint initiative to address population and 
AIDS in developing nations and new environmental assistance to Central 
and Eastern Europe.
    Our discussions today focused chiefly on economics. The central 
concern of my administration has been preparing our country for the new 
global economy in the 21st century. That is why we've invested in our 
people, cut our deficits, and pursued more open markets through NAFTA, 
through the Uruguay round of GATT, through APEC.
    As the world's second largest market, Japan must be our strategic 
partner in efforts to spur global growth. That is why I've attached as 
much importance to our economic alliance as to our political and 
security alliance. For our relationship to be strong, we must have a 
more mutually beneficial economic partnership. Such a partnership will 
benefit all our citizens with more jobs and opportunities for American 
workers and more choices and lower prices for Japanese consumers. 
Indeed, we seek to open Japan's economy not only for our own products 
but for those from the rest of the world as well.
    Even though we have negotiated over 30 trade agreements with Japan 
since 1980, Japan still remains less open to imports than any other G-7 
nation. Its regulations and practices screen out many of our products, 
even our most competitive products. To take one example, when our 
medical technology firms sell in Europe, they earn 40 percent of the 
market there. In Japan, they earn just 15 percent. The same holds in 
many other sectors.
    Last July, our two Governments agreed on a framework to address a 
wide range of macroeconomic structural and sectoral trade issues. We 
focused on opening markets. We agreed to seek agreements containing, and 
I quote, ``objective criteria'' that would result in, quote, ``tangible 
progress''. We agreed to hold two summits each year to evaluate that 
progress. Today was the first such meeting. Unfortunately, we've not 
been able to reach agreement in any of the four areas we identified last 
July. Japan's offers made in these negotiations simply did not meet the 
standards agreed to in Tokyo.
    Today we could have disguised our differences with cosmetic 
agreements. But the issues between us are so important for our own 
nations and for the rest of the world that it is better to have reached 
no agreement than to have reached an empty agreement. Of course, if 
Japan has further proposals, our door remains open. But ultimately, 
Japan's market must be open.
    Over the past 40 years, the relationship between the United States 
and Japan has been the strongest when all three of its components, 
security, political, and economic, were seen by both our peoples as 
mutually beneficial. I am committed to improving our economic ties not 
only because doing so will mean more jobs and better standards of living 
in both nations but because it will strengthen every aspect of our 
relationship. I remain confident that we can work together to provide 
leadership in this new global economy. I have enormous confidence in the 
sincerity and the capacity and the vision of Prime Minister Hosokawa. 
And I am absolutely convinced that the relationship between the United 
States and Japan, founded on mutual respect and responsibility, ever 
growing in its maturity, will, as it must, remain vibrant and strong.
    Mr. Prime Minister.
    Prime Minister Hosokawa. Thank you, Mr. President. Today, President 
Clinton and I discussed wide-ranging issues from trade and economic 
matters, the current international situation, and to the future of the 
Asian-Pacific region and our cooperation on global issues. The list of 
these extensive issues reflects the matured relationship between Japan 
and the United States. And to be very candid, I think we had a very good 
meeting.
    As to the framework talks, we have not yet come to agree on all the 
important issues, despite our intensive negotiations over the past 6 
months. We are, however, in agreement that we should in no way allow 
this result to undermine the strong and friendly relationship between 
our two countries.
    Since I assumed office, my administration has launched a series of 
measures for macroeconomic management in Japan. The other day I 
announced a comprehensive package of economic measures, the total amount 
of

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which is the largest scale ever. I am convinced that through these 
measures, reinforced by appropriate economic policies by other 
governments, we'll be able to achieve over the medium term a highly 
significant decrease in our current account surplus.
    As to the sectoral issues of the framework talks, our respective 
positions regarding the relationship between the objective criteria and 
the numerical targets did not converge. As part of my inner-driven 
reform, I am determined to take initiatives on our government 
procurement. To this end, for example, the Government of Japan has 
already announced such measures as the action program on government 
procurement, and concrete efforts are being made in line with this 
program.
    In addition, as to the insurance issue, I place particular emphasis 
on achieving greater transparency in administrative procedures and 
promoting deregulation, which will create a better business climate for 
foreign insurance companies in Japan. In the areas of autos and auto 
parts, positive effects of industrial cooperation between Japan and the 
U.S. are not steadily becoming apparent. The Government of Japan will 
continue to provide possible support to cooperation between our private 
sectors in this field.
    There is no doubt that Japan-U.S. cooperation in the areas of 
political and security relations has expanded and intensified. The 
increasing possibility of the Asia-Pacific region evolving into a 
community would give our partnership a new task and a prospect for 
further development. The suspected development of nuclear weapons by 
North Korea is currently the highest concern for the security in 
northeast Asia. This issue also poses a great challenge into the 
international nuclear nonproliferation regime. Today the President and I 
had very meaningful discussion on this matter.
    In this post-cold-war era, the possible areas of cooperation between 
Japan and the United States are enormous. In fact, under the framework 
talks the two countries have discussed such issues of mutual concern as 
global environment, population, and human immune deficiency virus, or 
AIDS. Japan will mobilize approximately $3 billion over the next 7 years 
to bear on urgent matters of growing global population and AIDS. The 
President and I are fully committed to cooperation in these areas.
    In the past, Japan and the U.S. sometimes have reached ambiguous 
agreements which glossed over the problems of the time, only to find 
them become sources of later misunderstandings between our two countries 
from time to time. Now I firmly believe that our relationship in this 
new era is maturing to an extent each of us respects and has confidence 
in the judgments of the other, each of us makes utmost efforts to tackle 
the issues that each side responsibly understands and identifies but, at 
the same time, frankly admit what we can and what we cannot do despite 
such best efforts. I believe such is the relationship between grownups, 
as we two are.
    Since I took office I've sought to realize a genuine reinstatement 
of politics in the management of the critical processes of politics, 
economics, and government administration. As a like-minded colleague 
trying to bring about reforms in the social and political processes, I 
highly appreciate and respect the leadership exercised by President 
Clinton and his administration on both the domestic and international 
front, including budget deficit reduction and on bringing NAFTA to a 
successful conclusion and in opening a new frontier for APEC. I am 
firmly convinced that the reform efforts that President Clinton and I 
are undertaking would reinforce the vital Japan-U.S. relationship and 
lead to further progresses in the world community.
    Thank you.
    The President. Helen [Helen Thomas, United Press International].
    May I say one thing before we begin? I have agreed that I will call 
on an American journalist, and then the Prime Minister will recognize a 
Japanese journalist, and then we will alternate one after the other. 
That's not a numerical target. [Laughter]

Japan-U.S. Trade

    Q. Do you think that you were misled last July by the Japanese in 
terms of their intent to really reach an agreement?
    Mr. Prime Minister, do you agree with the President's allegation 
that you are the most closed of the G-7 nations? And if that's true, why 
is it so?

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    The President. Well, first of all, the G-7 agreement, the agreement 
we concluded with Japan last summer was, I think, a good framework. We 
all recognized that it had to be implemented. I can't say that the 
people who concluded the agreement last summer, who are not here to 
defend themselves, did not do it in good faith. I would not say that; I 
cannot say. All I can tell you is we haven't reached an agreement.
    Q. Can you say why?
    The President. Because we couldn't agree on what constituted 
evidence of market openings, and there are other reasons as well, but at 
least that is one.
    Prime Minister Hosokawa. In the way we look at it, in the areas of 
government procurement, insurance business, and so on, in these areas we 
believe that to a large measure we've been able to boil down the issues. 
However, unfortunately, at the very end we were not able to clear the 
hurdle of numerical targets, and we regret that very much. As the 
President mentioned earlier, in the days ahead, we on each side will try 
and sort out some problems that remain and do our best efforts in order 
to resolve the remaining problems and arrive at a good agreement.
    Q. With regard to how you address the remaining issues, what is the 
time schedule for reaching an agreement?
    Prime Minister Hosokawa. I don't know. We'd like to reach an 
agreement as early as possible. But I think there is a need for a little 
bit of cooling off.

Russian Position on Bosnia

    Q. Mr. President, on Bosnia, how do you avoid a major breach with 
President Yeltsin? He's quoted today as saying that NATO lacks the 
authority to approve air strikes. You've taken the position that NATO 
has that authority. Is there any way to reconcile these differences?
    The President. I think so. We talked about it a little on the phone 
today, and I reminded President Yeltsin it was the Secretary-General of 
the United Nations acting under the authority of last summer's U.N. 
Security resolution, that had asked NATO to develop a plan to stop the 
shelling of Sarajevo and the innocent killing of civilians, and that 
there would be no possession taken of weapons left within the 20-
kilometer safe zone by NATO but by the U.N. troops. So I don't think, 
therefore, we have to go back to the Security Council.
    They're discussing this in greater detail today in New York. But I 
think that the most encouraging thing to me was that he agreed we had 
the same long-term objective, which was a peace agreement, and the same 
short-term objective, which was to stop the shelling and killing of 
innocent civilians.
    Q. But isn't there a difference on this other issue?
    The President. I don't think so.

Japan-U.S. Trade

    Q. Mr. President, now that the trade agreement has failed, how 
optimistic are you and the members of your administration for the future 
agreement?
    The President. I just don't know. You know, the problem may be--it 
may be one of words; it may be one of the feelings behind the words. 
Japan has taken the position with which we on the surface do not 
disagree, that Japan does not wish to commit numerical targets that 
amount to managed trade. We understand that. We have taken the position 
that there have to be some objective standards by which to judge whether 
we are making progress or not, because if we just talk about improving 
processes, that is what we have done in the past without much progress. 
That is why last summer we used the words ``objective criteria'' to 
include quantitative measures or qualitative measures or both, as 
appropriate.
    For example, I agree that it's not fair to disregard--let me give 
you some examples--let's suppose there's an area in which our trade is 
in great imbalance. You have to take into account, in addition to 
whether there has been progress from, let's say, 1992 to 1995, also what 
happened to the exchange rate, what happened to domestic demand and the 
economy in Japan, whether the American business in question produced a 
product competitive in price and quality and did the things necessary to 
pierce the Japanese market.
    So, it's not for us--we don't think we're asking for numerical 
targets, we think we're asking for a set of objective criteria by which

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we can judge whether we're making progress in opening the market. That, 
I think, is a fair statement of the nub of our argument. And I have no 
idea what will happen from here on in. We just didn't make it.
    Yes, go ahead.

Bosnia

    Q. Mr. President, on Bosnia, there were reports that the United 
States, on the diplomatic front, is considering a piecemeal lifting of 
the sanctions if the Serbians will be cooperative at the peace talks, 
and that you have reconsidered your commitment to have 50 percent of the 
troops in any potential peacekeeping force be American, that in fact, it 
would only be a third of the ground forces be American if there were a 
peace agreement in place. Can you comment on that and on also the late 
reports that more F-15E's are now en route to Bosnia?
    The President. Let me just say--I can only comment on two things. 
First of all, in terms of the troops, all we ever said about that was 
that we would expect to have less than half. We never specified a 
specific amount. Secondly, I have never even discussed any partial 
lifting of the Serbian embargo. No one has brought it to me. It has 
never been discussed in my presence. If it is an option being 
considered, it's been considered by somebody other than me. It's just 
not been a part of our discussions.
    Q. [Inaudible]--violated the cease-fire yesterday?
    The President. No.

Japan-U.S. Trade

    Q. With regard to objective criteria, you had an agreement with the 
previous administration. Would you say that the adjustment was wrong, or 
does this mean that the Hosokawa administration is going to make a 
judgment on a new basis?
    Prime Minister Hosokawa. With regard to the things that have been 
subject to negotiations to date, I believe that we have seen some 
progress. So this does not mean that we're going to start something 
anew, but we'll pursue these matters further to build on the results 
that have been achieved so far.
    Is that the point you were asking?
    Q. Well, the previous administration--the outside cabinet agreed on 
the framework talks and on objective criteria. So would you say that the 
previous administration erred in their judgment?
    Prime Minister Hosokawa. No, that's not the case.
    The President. I get that kind of question all the time. Don't let 
it bother you. [Laughter]
    Go ahead.
    Prime Minister Hosokawa. With regard to the interpretation of 
numerical targets, I think there is a difference between the two sides, 
and we have not been able to clear that difference easily.
    Q. What are the kinds of things that the United States can do to 
compel Japan to change its ways? And have you given any thought to 
making it just as hard for Japanese companies to do business over here 
as it is, as you say, for American companies to do business over there?
    The President. Well, until 4 o'clock this morning we were working as 
hard as we could to reach an agreement, so I'm not prepared to say yet. 
We're going to have to think about that. I tried to characterize this as 
a period of reflection now. We just have to assess where we are.
    Q. Mr. President, as you know, the Japanese public very strongly 
supports the Hosokawa government's policy calling for deregulation and 
less government intervention into the economic system. Against that 
background, how would you address the Japanese public's concern that 
accepting an American request for Japan to agree to predetermine the 
levels and the quantities of the American imports into the Japanese 
market would inevitably entail more government intervention into the 
whole economic system?
    The President. We do not want that. I mean, I think this is the nub 
of the disagreement, and I think I understand the Japanese position in 
addition to the American position. We do not want Japan to commit to a 
specific volume of imports by a specific time. We do want to assess 
whether we are making progress toward opening markets with the use of 
objective criteria rather than just change processes.

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    One of those criteria would be, what is the difference in the level 
of imports; another might be, as I said earlier, the exchange rate 
changes; another might be the state of domestic demand in Japan; another 
might be the quality and price of the American product as evidenced by 
how well it's doing in our market or in Europe or somewhere else; 
another might be whether the American company or the American companies 
had made the necessary effort to do business in Japan.
    In other words, we understand why Japan does not wish to put itself 
in the position of having to manage its trade in that way. And I think 
probably what the Japanese negotiators fear is if there is a number in 
there, even along with a lot of other criteria, that either under my 
administration or at some time in the future, it will be used as the 
only basis for evaluating whether America should impose some sort of 
trade sanctions. That is not our intent. But I think it's fair to say 
that that is the core of our disagreement. That is, when you put the 
question the way you did, I agree with your position. But that is not 
what we are asking to do.

North Korea

    Q. Mr. President, you mentioned that you also discussed the 
situation on the Korean Peninsula. As you know, later this month the 
International Atomic Energy Agency has to certify that North Korea is or 
is not engaged in a nuclear weapons program, has developed a nuclear 
weapons program. How serious is the situation right now? And what do you 
and Prime Minister Hosokawa, what do you plan on doing if the IAEA 
certifies it can no longer say that North Korea is not complying with 
the Nuclear Non-Proliferation Treaty?
    The President. Well, we discussed that today, and obviously we 
discussed what our options were, including sanctions. We discussed also 
the fact that in this particular policy, Japan, China, South Korea, and 
the United States all want a nonnuclear Korean Peninsula. All very much 
want North Korea to comply with our IAEA standards and therefore 
permitting it to resume some contact with the South. That has been the 
position of all four of our countries, and what we're doing now is 
consulting all of us among one another to try to see what our options 
are. But obviously, the sanctions option is one option.
    Do you have anything to add?
    Prime Minister Hosokawa. Well, we also have a very strong and deep 
concern of the issue. Within the coming 10 days or so, very soon, I 
would say, this issue is going to face a climax. And we very much hope 
that North Korea will move in the right direction. As President Clinton 
said, we shall, together with the United States, China, and South Korea, 
we would like to step up our approach vis-a-vis North Korea. At the U.N. 
Security Council, if a sanction is proposed, then Japan, to the extent 
Japanese laws allow, will put in place all possible measures.

Japan-U.S. Trade

    Q. I have a question for both leaders. Looking at the past 6 months 
of negotiations, we could detect so much new mutual distrust from each 
side, from American side, a distrust of having been cheated, and from 
Japanese side, a distrust of this objective criteria could be for 
sanction. So do you have any idea of removing this distrust and changing 
the mood and course of coming discussions?
    Prime Minister Hosokawa. Well, we said we'll just cool our head for 
a while.
    The President. Well, let me say, in the last 6 months my personal 
trust and admiration for Prime Minister Hosokawa has only increased, and 
for the government, because of political reform, because Japan exercised 
leadership in the Uruguay round, because of the initiatives on 
construction and rice, because of the fight for tax reform and the 
stimulus, because of the deregulation effort. I think that Japan is 
moving in the right direction.
    Both of us came to this office carrying, if you will, the 
accumulated either fears or experiences of years and years of trade 
negotiations and frustrations. So I would say that this trust issue, I 
would hope, can be worked out. But I don't want to minimize it. I think 
it's a very serious problem because the other approaches have still left 
us with such a huge trade deficit which causes consumer prices to be 
very high in Japan and which puts our

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people here and our economy in a very difficult situation.
    So I would say that the rest of our relationship is in good shape, 
the security relationship, the political relationship. I would say that 
my level of personal trust in the Prime Minister and his government is 
very strong. But I would say this is a serious problem.
    Q. I'd like to ask the Prime Minister if, after being here these 
days and having this longer-than-expected consultation today with 
President Clinton, that you are more prepared than you may have been to 
believe that when the United States side says, ``Yes, we may want 
numerical progress indicators, but we don't want managed trade,'' that 
that is true?
    Prime Minister Hosokawa. Well, as you've just said, rightly, we do 
not want managed trade, and I think I speak on behalf of everyone when I 
say that. Unfortunately, as the President mentioned in passing earlier, 
too, we don't want numerical targets to gain a life of its own and turn 
into another semiconductor case, because at the end of the day, we 
believe that will lead to managed trade. My administration is promoting 
deregulation, and so it runs right in the face of our basic tenet. This 
is what I've been telling the President during our meeting today.
    The President. That, if we were asking for the semiconductor 
agreement, it would be right. But that's not what we're asking for. What 
we're asking for is what we agreed to last summer, which was a way of 
measuring by objective standards whether progress is being made in 
opening markets.
    And I want to say, we've not sought anything for the United States 
we've not sought for other countries as well. We've sought no special 
access or special treatment. And we just seek a list, if you will, of 
those things by which you could determine whether progress is being 
made, or if progress is not being made, that there are reasons other 
than closed market policies for the lack of progress. There could be 
reasons other than that: no domestic demand, changes in the exchange 
rates, inadequate effort by Americans, not competitive products or 
services.
    Q. I think that the opening of Japanese market is very important, 
and I think Japanese consumers and Japanese people believe in that. But 
I think the reason why you couldn't come up with an agreement today for 
the framework talks is that because Japanese people--or the numerical 
target approach is not really popular among the Japanese people or 
Japanese industry, including Japanese bureaucrats. So I wonder whether 
you think, Mr. President, whether you think that you would come up with 
any agreement or any result or outcome in the near future with this 
numerical target approach? Also, I wonder whether you think that is 
supported by the Japanese ordinary audience?
    And also, I heard that Mr. Gore raised the question of Japanese 
bureaucrats in his talks with Mr. Hata. I wonder whether, Mr. President, 
if you think that the Japanese bureaucrat is a kind of burden or a 
barrier in opening up Japanese market? [Laughter]
    The President. I thought you'd never ask. No.
    First of all, I understand that the numerical target is not popular, 
as you said, among the Japanese people or the Japanese Government. 
America's trade deficit with Japan is not very popular among the 
American people or the American Government. It's hard to explain it, 
year-in and year-out always getting bigger.
    I think in every society, the permanent government is more change-
averse than the changing government. I think that is true in every 
society. In some societies it's more true than others. And the stronger 
the permanent civil service is, if you will, in the making of policy, 
the more likely they are to be change-averse. If you look at the history 
of Japan from where you started after the Second World War through the 
next 45-plus years, having a system in which you produce for your own 
market and the world, had high savings rates, low consumption rates, 
relatively closed markets, and relatively high value products, worked 
dramatically to improve the standard of living of your people. But at 
some point as your growth rates become more normal, as they have in the 
last 10 years, and as the capacity of your people alters and the 
aspirations of your people alter, you have to develop a more open 
economy and society.
    I couldn't say it any more eloquently than the Prime Minister did in 
the book that he

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wrote that he gave me to read. So I don't want to pick a fight with any 
particular sector of Japanese society. I would just say that we know 
we're in a process of change. We're both committed to it. That's the 
good news. I also think it's good news that we didn't come up with an 
agreement today that didn't mean anything. And we're just going to have 
to keep dealing with this and try to find some way out of it, because we 
have to come to trust each other across systems that are still very 
different.
    Thank you very much.

Note: The President's 46th news conference began at 2:41 p.m. in the 
East Room at the White House. Prime Minister Hosokawa spoke in Japanese, 
and his remarks were translated by an interpreter.