[Weekly Compilation of Presidential Documents Volume 30, Number 27 (Monday, July 11, 1994)]
[Pages 1435-1438]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
The President's News Conference With Prime Minister Tomiichi Murayama of 
Japan in Naples, Italy

July 8, 1994

    The President. Good afternoon. I am pleased to have had the 
opportunity to meet with Prime Minister Murayama for the first time. We 
had a warm and productive session in which we reaffirmed the strong 
relationship between our two countries.
    We began our talks with a discussion of North Korea and the fresh 
opportunity to resolve the situation that our common determination and 
diplomacy have produced.
    This is an important day. The third round of high-level talks is now 
beginning in Geneva. During those talks, North Korea has agreed to 
freeze verifiably the reprocessing and refueling elements of its nuclear 
program. Throughout this process, we have worked very closely with Japan 
and the Republic of Korea as well as with Russia and China.
    I'm especially pleased by the assurances of Prime Minister Murayama 
this morning

[[Page 1436]]

of the continuity of Japanese foreign policy and our security 
relationships. We agreed to continue frequent consultations on the 
Korean situation.
    The Prime Minister also described his plans for increasing Japan's 
economic growth and his policy of working toward global growth. I 
support the Prime Minister's measures to spur Japan's economic growth 
and to pursue strong open market efforts through GATT. I urged the Prime 
Minister to also pursue strongly our framework talks and our common 
efforts to complete the GATT this year.
    We discussed this weekend's G-7 meetings, agreed that in this 
meeting the G-7 leaders should turn to a long-term emphasis for laying 
the foundations for the global economy of the 21st century.
    In closing, let me reaffirm my view that there is no more important 
bilateral relationship in the world than that between the United States 
and Japan. I believe that Prime Minister Murayama and I can build on the 
relationship that we began today to make real progress in all aspects of 
the Japanese-U.S. relationship, security, political, and economic. I 
look forward to the opportunity to turn today's constructive talks into 
constructive action.
    Mr. Prime Minister.
    Prime Minister Murayama. Thank you. For about an hour and a half I 
had exchange of views with the President. I very candidly explained the 
Japanese political situation today. For as many as four times the 
government changed within a year in Japan, and I believe that there are 
some people who take various views about the situation. I wanted the 
President to have a full understanding of the situation.
    For 38 years, one party was in power, and now we have shifted over 
the days of coalition. And Japanese politics will be changing 
significantly. And after a change, we believe--in order to change the 
policy of Japan we also need a stable government. So the Liberal 
Democratic Party, the Japan new party, the Social Democratic Party of 
Japan and--organized into a coalition in order to try and find out the 
future course of Japanese politics. And in a word, as the President has 
just said, we shall continue with the foreign policy that our past 
governments have maintained. The Japan-U.S. security system will be 
maintained as well.
    As for Japanese domestic politics, we shall actively pursue reforms. 
To that end, we absolutely need a stable government. That is what I 
explained to the President, and I believe the President understood it in 
full.
    A continuation of Japan-U.S. relations in a favorable state will be 
very essential in making sure that Japan and the United States will be 
able to address important situations around the world properly. And we, 
therefore, I told the President, would like to maintain steadfastly the 
Japan-U.S. relations.
    On the economic front, Japan will work to recover the economy on the 
strength of domestic demand and ensure sustainable growth of the 
Japanese economy. The U.S. economy is on the track toward expansion, and 
we also see that the Western European economies are gradually moving on 
to recovery.
    So how are we to manage Japanese domestic policy, economic policy, 
bearing in mind such economic situations around the world? And I made 
three points that, first of all, we shall continue with a tax cut next 
year at the same level as this year. Now, as I mentioned, Japanese 
public investment is gradually improving, and personal consumption is 
gradually improving, and fiscal--is proceeding.
    In order to further give strength to the Japanese recovery we should 
like to further review public investment, qualitative and 
quantitatively. We have set on 430 trillion yen over a 10-year period. 
We shall review qualitative and quantitatively this amount and rethink 
the amount. And also, in terms of public investment and distribution of 
that amount, we shall shift emphasis to the consumer and try to expand 
the Japanese economy on the strength of expanding domestic demand. And 
this was kindly understood by the President.
    We also discussed North Korean issue and others as well. And 
fortunately, thanks to the tenacious efforts by the United States, now 
U.S.-North Korean talks are proceeding in Geneva, and soon there will be 
North-South Korean summit talks as well. And we very much hope that 
through dialog the matters will be resolved, and we should like to do 
our best to that end. And Japan, U.S., and

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South Korea will have to maintain close contact with each other in order 
to achieve that. And we have a common understanding on that point.
    Inclusive of this, as well as other points, Japan and the United 
States, to the maximum extent possible, should maintain good relations 
with each other not only in the interest of our two countries but for 
the entire world. And this again we see eye-to-eye with each other.
    Thanks to the meeting this time, I, at a personal level as well, I 
believe have been able to have the President's understanding and the 
President's suggestions not only in word but in deed--that is show what 
we can. And so in good faith we'd like to continue to promote good 
relations between Japan and the United States.
    Thank you very much.
    The President. Let me say, as we begin now, by prior arrangement 
we're going to take a couple of questions today from the American press 
and the Japanese press. And then I'm going to meet with all of you again 
in the news window in a couple of hours. But we'll start.
    Helen [Helen Thomas, United Press International].

Japan-U.S. Trade

    Q. Mr. Prime Minister, you didn't mention trade in a very strong 
way. And there is a perception in the United States that Japan likes to 
sell to us but doesn't really want to buy many of our products. And you 
didn't talk about widening and opening your markets, which is apparently 
the crux of our problem. What's your answer to that?
    Prime Minister Murayama.  May I? Well, as I mentioned earlier, we 
decided on 279 derivation items, and we shall continue to promote 
deregulation, for that matter. And also, we shall decisively promote 
market access opening, trade liberalization, so that U.S. products as 
well as others will flow into the Japanese market and the Japanese 
consumers will be able to enjoy the benefits of those products. And so 
we should like to promote two-way trade and not that we are disliking 
American products or anything.

The Yen and the Japanese Government

    Q. Mr. Prime Minister, I'd like to ask two questions. First of all, 
the precipitous yen appreciation is shaking the Japanese industry. To 
what extent did you discuss that matter? And the other question, with 
regard to maintenance of Japan, your security--you are Prime Minister 
from the Socialist Party, and I wonder, do you think that you've had the 
understanding of the President on your position?
    Prime Minister Murayama. With regard to yen appreciation, there is--
macroeconomic conditions lie behind that situation, I believe. And I 
don't think that they'll be stipulating an exchange rate immediately. 
However, if countries around the world, and especially Japan and the 
United States, should--or at least these two countries should--take 
policy that is conducive to more stable exchange rates in cooperation 
with each other. So we hope that those responsible for the matter will 
talk to each other and work at it properly. There is a common 
understanding on that.
    With regard to the security system, there was a clear-cut 
understanding when we established a coalition government, and the Social 
Democratic Party of Japan will adhere to that understanding. This 
government is not led by ideology, but rather politics today is led by 
pragmatic policy. That policy must keep abreast of reality, and I'm sure 
we would have to promote policy that will be supported by the general 
public as well. And I don't see any contradiction between security and 
our policy.

Global Economy and Trade

    Q. President Clinton, I'd like to ask what your impressions were of 
the situation involving the yen and the dollar. And also, do you feel 
that Japan has made sufficient progress in the year since the last G-7 
on opening its markets to the U.S.?
    The President. First, with regard to the yen and the dollar, I think 
that the relationship of the yen to the dollar is obviously a function 
of the movement of world currency markets, which have something to do 
with macroeconomic realities and something to do with perceptions and 
movements in the market. I think it's important not to overreact.

[[Page 1438]]

The United States does not seek to grow its economy or change its trade 
balance through a low dollar; we do not want that. We want the dollar to 
be properly valued, not undervalued. We want to grow through 
productivity and economic strength.
    But I think, on the other hand, it would be a mistake for us to 
change the fundamental objective that we all ought to have, the one we 
agreed to here at the G-7 last year, which is to pursue global growth. 
The United States was asked to bring its budget deficit down; we have 
done that in a remarkable fashion and more than anyone thought we could.
    Europe was asked to lower its interest rates, and they did that for 
a year. Now, they've gone up again in the first 6 months of this year, 
largely because of the signs of new economic growth. Japan was asked to 
expand its economy through domestic stimulation, and the Prime Minister 
has reaffirmed his intent to pursue that course.
    Now, if you look at what's happened in the last year, we have had 
growth in the G-7, and we have had growth without inflation. If we 
continue to pursue growth without inflation and to work on generating 
new jobs out of that growth, then eventually the macroeconomic realities 
will assert themselves, and the currencies will be righted according to 
market conditions. I think that is what will happen. And I think it's 
important that we not lose sight of the real economy in which the people 
of the G-7 nations and indeed the people of the world live. So that's 
what I think about that.
    On the second question, my candid answer would have to be no. But I 
think if you look at--the Prime Minister was very good--basically run 
through the last year of Japan's very interesting political history with 
me in a way that, frankly, increased my own understanding not only of 
what has happened but of the nature of this present coalition 
government. It is frankly difficult to imagine how the hard issues that 
are the subject of the framework talks could have been resolved against 
a background of as much political change as the nation has sustained in 
the last year.
    So I think what I'm looking forward to now is a resumption of the 
talks in good faith and continued progress. And I was encouraged by what 
the Prime Minister said about wanting more open markets, wanting more 
American sales.
    There have been, I might add, some specifically encouraging 
developments. The United States was able to sell rice in Japan in 
substantial quantities this year. Even though the number is quite small, 
there's been a substantial increase in the sale of American automobiles 
in Japan partly, I might add, due to the aggressive efforts of our auto 
companies to build cars with the driving mechanisms on the right side of 
the car from the point of the view of the Japanese and to do some other 
things that are important, so I wouldn't say the signs are all bleak. My 
answer is, no, we haven't made enough progress, but I think we may be in 
a position now and in a more stable position to make some progress, and 
that's what I'm looking toward.
    We agreed to stop at the three questions, so I will honor my 
agreement, and I'll meet with the American press again later today in a 
few hours.
    Thank you.

Note: The President's 61st news conference began at 12:31 p.m. at the 
Hotel Vesuvio. A tape was not available for verification of the content 
of this news conference.