Administration of William J. Clinton, 1994 / Feb. 11

The President. That’s what he said. He said go play golf today, but the weather won’t permit we have to make sure it never happened again. that either. He said, ‘‘What if we really had to talk about Q. Mr. President, do you think that the rela- an emergency?’’ That’s what he said, too. tionship between the U.S. and is now [At this point, one group of reporters left the in rough water? room, and another group entered.] The President. No, I think it’s very strong. I feel very strongly about what the Prime Min- Japan ister is trying to do. I supported strongly his Q. Mr. President, is there any possibility for political reform package, and I support the eco- you to have another meeting with Prime Min- nomic efforts I think he is trying to make. So ister Hosokawa this afternoon or evening or to- I think we have a good relationship. Just be- morrow morning? cause we have some disagreements doesn’t mean The President. I don’t know. We haven’t start- we don’t have a good relationship. ed this one yet. I would like to spend a lot Q. So you—— of time with him. The President. More later. We’ll have more Q. Because you decided not to leave for Ar- later. We’ll answer your questions at the end kansas this evening. We heard that you decided of the—at the press conference. not to leave for Arkansas this evening. The President. The weather is bad there and here. NOTE: The exchange began at 11:35 a.m. in the Q. Was it only the weather? Oval Office at the White House. A tape was not The President. Yes. But I mean, I’m always available for verification of the content of this ex- glad to see the Prime Minister. I wish we could change.

The President’s News Conference With Prime Minister Morihiro Hosokawa of Japan February 11, 1994

The President. Good afternoon. It’s a pleasure discussed our shared interest in the Asian Pacific to welcome Prime Minister Hosokawa to the and its stability, including developments in Rus- White House. The Prime Minister and I met sia, , and elsewhere. And I look forward last in Seattle at the APEC conference. Our to continuing this discussion this summer at the dialog there was based on a new honesty and G–7 summit in Naples. respect that continued in our talks today. Our shared interests are nowhere clearer than Both of us were elected on a mandate for on the Korean Peninsula. North Korea’s nuclear change, and the Prime Minister has shown real program poses a serious threat to regional sta- courage and commitment to making change bility and to international nonproliferation ef- occur by advocating and securing political re- forts. We agreed to continue our close coopera- forms, by opening Japan’s construction and rice tion in pursuing a nonnuclear Korean Peninsula. markets, and by seeking to deregulate Japan’s Our nations today have also embraced a com- economy. He also ushered through a tax cut mon agenda for cooperation on global issues that is a step towards spurring growth. And I such as population, transportation technology, know the Prime Minister proposed an even larg- and the environment. It includes a $12 billion er budget stimulus. I commend all these steps joint initiative to address population and AIDS which can move Japan toward greater openness. in developing nations and new environmental The United States and Japan have a long, assistance to Central and Eastern Europe. deep, and rich relationship. No relationship in Our discussions today focused chiefly on eco- the world is more important today. Our security nomics. The central concern of my administra- alliance, which is stronger than ever, is essential tion has been preparing our country for the to the Asian Pacific and elsewhere. Today we new global economy in the 21st century. That

229 Feb. 11 / Administration of William J. Clinton, 1994 is why we’ve invested in our people, cut our committed to improving our economic ties not deficits, and pursued more open markets only because doing so will mean more jobs and through NAFTA, through the Uruguay round better standards of living in both nations but of GATT, through APEC. because it will strengthen every aspect of our As the world’s second largest market, Japan relationship. I remain confident that we can must be our strategic partner in efforts to spur work together to provide leadership in this new global growth. That is why I’ve attached as much global economy. I have enormous confidence importance to our economic alliance as to our in the sincerity and the capacity and the vision political and security alliance. For our relation- of Prime Minister Hosokawa. And I am abso- ship to be strong, we must have a more mutually lutely convinced that the relationship between beneficial economic partnership. Such a partner- the United States and Japan, founded on mutual ship will benefit all our citizens with more jobs respect and responsibility, ever growing in its and opportunities for American workers and maturity, will, as it must, remain vibrant and more choices and lower prices for Japanese con- strong. sumers. Indeed, we seek to open Japan’s econ- Mr. Prime Minister. omy not only for our own products but for those Prime Minister Hosokawa. Thank you, Mr. from the rest of the world as well. President. Today, President Clinton and I dis- Even though we have negotiated over 30 cussed wide-ranging issues from trade and eco- trade agreements with Japan since 1980, Japan nomic matters, the current international situa- still remains less open to imports than any other tion, and to the future of the Asian-Pacific re- G–7 nation. Its regulations and practices screen gion and our cooperation on global issues. The out many of our products, even our most com- list of these extensive issues reflects the matured petitive products. To take one example, when relationship between Japan and the United our medical technology firms sell in Europe, States. And to be very candid, I think we had they earn 40 percent of the market there. In a very good meeting. Japan, they earn just 15 percent. The same As to the framework talks, we have not yet holds in many other sectors. come to agree on all the important issues, de- Last July, our two Governments agreed on spite our intensive negotiations over the past a framework to address a wide range of macro- 6 months. We are, however, in agreement that economic structural and sectoral trade issues. we should in no way allow this result to under- We focused on opening markets. We agreed mine the strong and friendly relationship be- to seek agreements containing, and I quote, ‘‘ob- tween our two countries. jective criteria’’ that would result in, quote, ‘‘tan- Since I assumed office, my administration has gible progress’’. We agreed to hold two summits launched a series of measures for macro- each year to evaluate that progress. Today was economic management in Japan. The other day the first such meeting. Unfortunately, we’ve not I announced a comprehensive package of eco- been able to reach agreement in any of the nomic measures, the total amount of which is four areas we identified last July. Japan’s offers the largest scale ever. I am convinced that made in these negotiations simply did not meet through these measures, reinforced by appro- the standards agreed to in . priate economic policies by other governments, Today we could have disguised our dif- we’ll be able to achieve over the medium term ferences with cosmetic agreements. But the a highly significant decrease in our current ac- issues between us are so important for our own count surplus. nations and for the rest of the world that it As to the sectoral issues of the framework is better to have reached no agreement than talks, our respective positions regarding the rela- to have reached an empty agreement. Of course, tionship between the objective criteria and the if Japan has further proposals, our door remains numerical targets did not converge. As part of open. But ultimately, Japan’s market must be my inner-driven reform, I am determined to open. take initiatives on our government procurement. Over the past 40 years, the relationship be- To this end, for example, the Government of tween the United States and Japan has been Japan has already announced such measures as the strongest when all three of its components, the action program on government procurement, security, political, and economic, were seen by and concrete efforts are being made in line with both our peoples as mutually beneficial. I am this program.

230 Administration of William J. Clinton, 1994 / Feb. 11

In addition, as to the insurance issue, I place like-minded colleague trying to bring about re- particular emphasis on achieving greater trans- forms in the social and political processes, I parency in administrative procedures and pro- highly appreciate and respect the leadership ex- moting deregulation, which will create a better ercised by President Clinton and his administra- business climate for foreign insurance companies tion on both the domestic and international in Japan. In the areas of autos and auto parts, front, including budget deficit reduction and on positive effects of industrial cooperation between bringing NAFTA to a successful conclusion and Japan and the U.S. are not steadily becoming in opening a new frontier for APEC. I am firmly apparent. The Government of Japan will con- convinced that the reform efforts that President tinue to provide possible support to cooperation Clinton and I are undertaking would reinforce between our private sectors in this field. the vital Japan-U.S. relationship and lead to fur- There is no doubt that Japan-U.S. cooperation ther progresses in the world community. in the areas of political and security relations Thank you. has expanded and intensified. The increasing The President. Helen [Helen Thomas, United possibility of the Asia-Pacific region evolving Press International]. into a community would give our partnership May I say one thing before we begin? I have a new task and a prospect for further develop- agreed that I will call on an American journalist, ment. The suspected development of nuclear and then the Prime Minister will recognize a weapons by North Korea is currently the highest Japanese journalist, and then we will alternate concern for the security in northeast Asia. This one after the other. That’s not a numerical tar- issue also poses a great challenge into the inter- get. [Laughter] national nuclear nonproliferation regime. Today Japan-U.S. Trade the President and I had very meaningful discus- sion on this matter. Q. Do you think that you were misled last In this post-cold-war era, the possible areas July by the Japanese in terms of their intent of cooperation between Japan and the United to really reach an agreement? States are enormous. In fact, under the frame- Mr. Prime Minister, do you agree with the work talks the two countries have discussed such President’s allegation that you are the most issues of mutual concern as global environment, closed of the G–7 nations? And if that’s true, population, and human immune deficiency virus, why is it so? or AIDS. Japan will mobilize approximately $3 The President. Well, first of all, the G–7 billion over the next 7 years to bear on urgent agreement, the agreement we concluded with matters of growing global population and AIDS. Japan last summer was, I think, a good frame- The President and I are fully committed to co- work. We all recognized that it had to be imple- operation in these areas. mented. I can’t say that the people who con- In the past, Japan and the U.S. sometimes cluded the agreement last summer, who are not have reached ambiguous agreements which here to defend themselves, did not do it in glossed over the problems of the time, only to good faith. I would not say that; I cannot say. find them become sources of later misunder- All I can tell you is we haven’t reached an standings between our two countries from time agreement. to time. Now I firmly believe that our relation- Q. Can you say why? ship in this new era is maturing to an extent The President. Because we couldn’t agree on each of us respects and has confidence in the what constituted evidence of market openings, judgments of the other, each of us makes utmost and there are other reasons as well, but at least efforts to tackle the issues that each side respon- that is one. sibly understands and identifies but, at the same Prime Minister Hosokawa. In the way we look time, frankly admit what we can and what we at it, in the areas of government procurement, cannot do despite such best efforts. I believe insurance business, and so on, in these areas such is the relationship between grownups, as we believe that to a large measure we’ve been we two are. able to boil down the issues. However, unfortu- Since I took office I’ve sought to realize a nately, at the very end we were not able to genuine reinstatement of politics in the manage- clear the hurdle of numerical targets, and we ment of the critical processes of politics, eco- regret that very much. As the President men- nomics, and government administration. As a tioned earlier, in the days ahead, we on each

231 Feb. 11 / Administration of William J. Clinton, 1994 side will try and sort out some problems that We have taken the position that there have to remain and do our best efforts in order to re- be some objective standards by which to judge solve the remaining problems and arrive at a whether we are making progress or not, because good agreement. if we just talk about improving processes, that Q. With regard to how you address the re- is what we have done in the past without much maining issues, what is the time schedule for progress. That is why last summer we used the reaching an agreement? words ‘‘objective criteria’’ to include quantitative Prime Minister Hosokawa. I don’t know. We’d measures or qualitative measures or both, as like to reach an agreement as early as possible. appropriate. But I think there is a need for a little bit of For example, I agree that it’s not fair to dis- cooling off. regard—let me give you some examples—let’s suppose there’s an area in which our trade is Russian Position on Bosnia in great imbalance. You have to take into ac- Q. Mr. President, on Bosnia, how do you count, in addition to whether there has been avoid a major breach with President Yeltsin? progress from, let’s say, 1992 to 1995, also what He’s quoted today as saying that NATO lacks happened to the exchange rate, what happened the authority to approve air strikes. You’ve taken to domestic demand and the economy in Japan, the position that NATO has that authority. Is whether the American business in question pro- there any way to reconcile these differences? duced a product competitive in price and quality The President. I think so. We talked about and did the things necessary to pierce the Japa- it a little on the phone today, and I reminded nese market. President Yeltsin it was the Secretary-General So, it’s not for us—we don’t think we’re ask- of the United Nations acting under the authority ing for numerical targets, we think we’re asking of last summer’s U.N. Security resolution, that for a set of objective criteria by which we can had asked NATO to develop a plan to stop judge whether we’re making progress in opening the shelling of Sarajevo and the innocent killing the market. That, I think, is a fair statement of civilians, and that there would be no posses- of the nub of our argument. And I have no sion taken of weapons left within the 20-kilo- idea what will happen from here on in. We meter safe zone by NATO but by the U.N. just didn’t make it. troops. So I don’t think, therefore, we have to Yes, go ahead. go back to the Security Council. They’re discussing this in greater detail today Bosnia in New York. But I think that the most encour- aging thing to me was that he agreed we had Q. Mr. President, on Bosnia, there were re- the same long-term objective, which was a peace ports that the United States, on the diplomatic agreement, and the same short-term objective, front, is considering a piecemeal lifting of the which was to stop the shelling and killing of sanctions if the Serbians will be cooperative at innocent civilians. the peace talks, and that you have reconsidered Q. But isn’t there a difference on this other your commitment to have 50 percent of the issue? troops in any potential peacekeeping force be The President. I don’t think so. American, that in fact, it would only be a third of the ground forces be American if there were Japan-U.S. Trade a peace agreement in place. Can you comment Q. Mr. President, now that the trade agree- on that and on also the late reports that more ment has failed, how optimistic are you and F–15E’s are now en route to Bosnia? the members of your administration for the fu- The President. Let me just say—I can only ture agreement? comment on two things. First of all, in terms The President. I just don’t know. You know, of the troops, all we ever said about that was the problem may be—it may be one of words; that we would expect to have less than half. it may be one of the feelings behind the words. We never specified a specific amount. Secondly, Japan has taken the position with which we on I have never even discussed any partial lifting the surface do not disagree, that Japan does of the Serbian embargo. No one has brought not wish to commit numerical targets that it to me. It has never been discussed in my amount to managed trade. We understand that. presence. If it is an option being considered,

232 Administration of William J. Clinton, 1994 / Feb. 11 it’s been considered by somebody other than address the Japanese public’s concern that ac- me. It’s just not been a part of our discussions. cepting an American request for Japan to agree Q. [Inaudible]—violated the cease-fire yester- to predetermine the levels and the quantities day? of the American imports into the Japanese mar- The President. No. ket would inevitably entail more government Japan-U.S. Trade intervention into the whole economic system? The President. We do not want that. I mean, Q. With regard to objective criteria, you had I think this is the nub of the disagreement, an agreement with the previous administration. and I think I understand the Japanese position Would you say that the adjustment was wrong, in addition to the American position. We do or does this mean that the Hosokawa adminis- not want Japan to commit to a specific volume tration is going to make a judgment on a new of imports by a specific time. We do want to basis? assess whether we are making progress toward Prime Minister Hosokawa. With regard to the opening markets with the use of objective cri- things that have been subject to negotiations teria rather than just change processes. to date, I believe that we have seen some One of those criteria would be, what is the progress. So this does not mean that we’re going difference in the level of imports; another might to start something anew, but we’ll pursue these be, as I said earlier, the exchange rate changes; matters further to build on the results that have another might be the state of domestic demand been achieved so far. in Japan; another might be the quality and price Is that the point you were asking? of the American product as evidenced by how Q. Well, the previous administration—the out- well it’s doing in our market or in Europe or side cabinet agreed on the framework talks and somewhere else; another might be whether the on objective criteria. So would you say that the American company or the American companies previous administration erred in their judgment? had made the necessary effort to do business Prime Minister Hosokawa. No, that’s not the in Japan. case. In other words, we understand why Japan The President. I get that kind of question does not wish to put itself in the position of all the time. Don’t let it bother you. [Laughter] having to manage its trade in that way. And Go ahead. I think probably what the Japanese negotiators Prime Minister Hosokawa. With regard to the fear is if there is a number in there, even along interpretation of numerical targets, I think there with a lot of other criteria, that either under is a difference between the two sides, and we my administration or at some time in the future, have not been able to clear that difference eas- it will be used as the only basis for evaluating ily. whether America should impose some sort of Q. What are the kinds of things that the trade sanctions. That is not our intent. But I United States can do to compel Japan to change think it’s fair to say that that is the core of its ways? And have you given any thought to our disagreement. That is, when you put the making it just as hard for Japanese companies question the way you did, I agree with your to do business over here as it is, as you say, position. But that is not what we are asking for American companies to do business over to do. there? The President. Well, until 4 o’clock this morn- ing we were working as hard as we could to North Korea reach an agreement, so I’m not prepared to Q. Mr. President, you mentioned that you say yet. We’re going to have to think about also discussed the situation on the Korean Pe- that. I tried to characterize this as a period ninsula. As you know, later this month the Inter- of reflection now. We just have to assess where national Atomic Energy Agency has to certify we are. that North Korea is or is not engaged in a Q. Mr. President, as you know, the Japanese nuclear weapons program, has developed a nu- public very strongly supports the Hosokawa gov- clear weapons program. How serious is the situ- ernment’s policy calling for deregulation and less ation right now? And what do you and Prime government intervention into the economic sys- Minister Hosokawa, what do you plan on doing tem. Against that background, how would you if the IAEA certifies it can no longer say that

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North Korea is not complying with the Nuclear ences of years and years of trade negotiations Non-Proliferation Treaty? and frustrations. So I would say that this trust The President. Well, we discussed that today, issue, I would hope, can be worked out. But and obviously we discussed what our options I don’t want to minimize it. I think it’s a very were, including sanctions. We discussed also the serious problem because the other approaches fact that in this particular policy, Japan, China, have still left us with such a huge trade deficit , and the United States all want which causes consumer prices to be very high a nonnuclear Korean Peninsula. All very much in Japan and which puts our people here and want North Korea to comply with our IAEA our economy in a very difficult situation. standards and therefore permitting it to resume So I would say that the rest of our relation- some contact with the South. That has been ship is in good shape, the security relationship, the position of all four of our countries, and the political relationship. I would say that my what we’re doing now is consulting all of us level of personal trust in the Prime Minister among one another to try to see what our op- and his government is very strong. But I would tions are. But obviously, the sanctions option say this is a serious problem. is one option. Q. I’d like to ask the Prime Minister if, after Do you have anything to add? being here these days and having this longer- Prime Minister Hosokawa. Well, we also have than-expected consultation today with President a very strong and deep concern of the issue. Clinton, that you are more prepared than you Within the coming 10 days or so, very soon, may have been to believe that when the United I would say, this issue is going to face a climax. States side says, ‘‘Yes, we may want numerical And we very much hope that North Korea will progress indicators, but we don’t want managed move in the right direction. As President Clinton trade,’’ that that is true? said, we shall, together with the United States, Prime Minister Hosokawa. Well, as you’ve just China, and South Korea, we would like to step said, rightly, we do not want managed trade, up our approach vis-a-vis North Korea. At the and I think I speak on behalf of everyone when U.N. Security Council, if a sanction is proposed, I say that. Unfortunately, as the President men- then Japan, to the extent Japanese laws allow, tioned in passing earlier, too, we don’t want will put in place all possible measures. numerical targets to gain a life of its own and turn into another semiconductor case, because Japan-U.S. Trade at the end of the day, we believe that will lead Q. I have a question for both leaders. Looking to managed trade. My administration is pro- at the past 6 months of negotiations, we could moting deregulation, and so it runs right in the detect so much new mutual distrust from each face of our basic tenet. This is what I’ve been side, from American side, a distrust of having telling the President during our meeting today. been cheated, and from Japanese side, a distrust The President. That, if we were asking for of this objective criteria could be for sanction. the semiconductor agreement, it would be right. So do you have any idea of removing this dis- But that’s not what we’re asking for. What we’re trust and changing the mood and course of com- asking for is what we agreed to last summer, ing discussions? which was a way of measuring by objective Prime Minister Hosokawa. Well, we said we’ll standards whether progress is being made in just cool our head for a while. opening markets. The President. Well, let me say, in the last And I want to say, we’ve not sought anything 6 months my personal trust and admiration for for the United States we’ve not sought for other Prime Minister Hosokawa has only increased, countries as well. We’ve sought no special access and for the government, because of political re- or special treatment. And we just seek a list, form, because Japan exercised leadership in the if you will, of those things by which you could Uruguay round, because of the initiatives on determine whether progress is being made, or construction and rice, because of the fight for if progress is not being made, that there are tax reform and the stimulus, because of the de- reasons other than closed market policies for regulation effort. I think that Japan is moving the lack of progress. There could be reasons in the right direction. other than that: no domestic demand, changes Both of us came to this office carrying, if in the exchange rates, inadequate effort by you will, the accumulated either fears or experi- Americans, not competitive products or services.

234 Administration of William J. Clinton, 1994 / Feb. 11

Q. I think that the opening of Japanese mar- the more likely they are to be change-averse. ket is very important, and I think Japanese con- If you look at the history of Japan from where sumers and Japanese people believe in that. But you started after the Second World War through I think the reason why you couldn’t come up the next 45-plus years, having a system in which with an agreement today for the framework talks you produce for your own market and the world, is that because Japanese people—or the numer- had high savings rates, low consumption rates, ical target approach is not really popular among relatively closed markets, and relatively high the Japanese people or Japanese industry, in- value products, worked dramatically to improve cluding Japanese bureaucrats. So I wonder the standard of living of your people. But at whether you think, Mr. President, whether you some point as your growth rates become more think that you would come up with any agree- normal, as they have in the last 10 years, and ment or any result or outcome in the near fu- as the capacity of your people alters and the ture with this numerical target approach? Also, aspirations of your people alter, you have to I wonder whether you think that is supported develop a more open economy and society. by the Japanese ordinary audience? I couldn’t say it any more eloquently than And also, I heard that Mr. Gore raised the the Prime Minister did in the book that he question of Japanese bureaucrats in his talks wrote that he gave me to read. So I don’t want with Mr. Hata. I wonder whether, Mr. Presi- to pick a fight with any particular sector of Japa- dent, if you think that the Japanese bureaucrat nese society. I would just say that we know is a kind of burden or a barrier in opening we’re in a process of change. We’re both com- up Japanese market? [Laughter] mitted to it. That’s the good news. I also think The President. I thought you’d never ask. No. it’s good news that we didn’t come up with First of all, I understand that the numerical an agreement today that didn’t mean anything. target is not popular, as you said, among the And we’re just going to have to keep dealing Japanese people or the Japanese Government. with this and try to find some way out of it, America’s trade deficit with Japan is not very because we have to come to trust each other popular among the American people or the across systems that are still very different. American Government. It’s hard to explain it, Thank you very much. year-in and year-out always getting bigger. I think in every society, the permanent gov- ernment is more change-averse than the chang- NOTE: The President’s 46th news conference ing government. I think that is true in every began at 2:41 p.m. in the East Room at the White society. In some societies it’s more true than House. Prime Minister Hosokawa spoke in Japa- others. And the stronger the permanent civil nese, and his remarks were translated by an inter- service is, if you will, in the making of policy, preter.

Interview With California Newspaper Publishers February 11, 1994

[The President’s remarks are joined in progress.] the supplemental appropriation has just con- The President. ——workers who are helping cluded. With luck, I’ll be able to sign this legis- the community, and their response has been lation tomorrow morning. I was in Los Angeles one of the most timely, comprehensive, and ef- within 48 hours of that quake, and your needs fective in memory. And as I emphasized when were clear to me and overwhelming. The fol- I visited you a few weeks ago, while short-term lowing week, as soon as Congress returned from disaster relief is absolutely necessary, I want to its recess, I transmitted to them a formal re- assure you that we’ll be there over the long quest for funds prepared by our OMB Director, run as well. Leon Panetta, from California. I’m pleased that The latest information on the status of the Congress, led by the California delegation, has disaster assistance is this: The conference on acted so quickly and so responsibly. In total,

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