[Weekly Compilation of Presidential Documents Volume 31, Number 2 (Monday, January 16, 1995)]
[Pages 43-48]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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 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.

[[Page 44]]

    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 
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.

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    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 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

[[Page 46]]

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

[[Page 48]]

me the marketplaces were being filled with the apples, but he didn't 
have a chance to get any. Now, shortly, the 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 83d 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.