CONTENTS American Electronics Association, Arnold Brenner, Motorola, Inc.......... American Insurance Association, Joseph A. Morein, the Chubb Corp Institute for International Economics, C. Fred Bergsten American International Automobile Dealers Association, statement and at- Association of International Automobile Manufacturers, Inc., statement Japan Automobile Manufacturers Association, Inc., William C. Duncan, letter National Foreign Trade Council, Inc., Robert H. Green, letter Page UNITED STATES-JAPAN TRADE, COMMERCIAL, AND ECONOMIC RELATIONS TUESDAY, JULY 13, 1993 HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, SUBCOMMITTEE ON TRADE, Washington, D.C. The subcommittee met, pursuant to call, at 10 a.m., in room 1100, Longworth House Office Building, Hon. Sam M. Gibbons (chairman of the subcommittee) presiding. [The press release announcing the hearing follows:] (1) FOR IMMEDIATE RELEASE SUBCOMMITTEE ON TRADE #12 1102 LONGWORTH HOUSE OFFICE BUILDING TELEPHONE: (202) 225-1721 THE HONORABLE SAM M. GIBBONS (D., FLA.), CHAIRMAN, The Honorable Sam M. Gibbons (D., Fla.), Chairman of the Subcommittee on Trade, Committee on Ways and Means, U.S. House of Representatives, today announced that the Subcommittee will hold a public hearing on U.S.Japan trade, commercial, and economic relations. The hearing will be held on Tuesday, July 13, 1993, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m. Japan is one of the United States' most important trading partners. Japan is the second largest (Canada is the first) export market for U.S. goods and also the second largest source of U.S. imports (again behind Canada). In the post Cold War era, trade, commercial, and economic issues are likely to take on new significance in the overall U.S.-Japan relationship, which in the past has been influenced more by foreign policy and national security concerns. The U.S.-Japan trade relationship has been as problematic as it has been important. U.S.-Japan trade frictions stem from a number of factors, the most obvious of which is the large merchandise trade surplus Japan has run with the United States and with the rest of the world (ROW). In 1992, Japan's surplus with the United States was approximately $48 billion and with the ROW, a record of $133 billion. A second source of difficulty has been Japan's failure to eliminate key barriers to market access. Such barriers include structural impediments, such as Japan's closed distribution system and Japanese land policy, and sectoral barriers in industries, including autos and auto parts, supercomputers, satellites, forestry products, agricultural products, telecommunications equipment, and construction. A third set of problems has arisen in conjunction with certain Japanese imports into the United States, particularly in key industries such as autos and steel. Finally, the U.S.-Japan trade relationship has been strained by allegations that Japanese-owned companies producing in the United States, the so-called "transplants," have engaged in anticompetitive practices. Although the Clinton Administration's policy on trade is evolving, recent reports indicate that the President and his trade and economic officials intend to take a pragmatic, "results-oriented" approach to tackling problems in the U.S.-Japan economic relationship. Among the objectives of this approach are to enhance American goods' and services' access to the Japanese market and to encourage Japanese "transplants" to source more from American companies. On April 16 of this year, President Clinton and Prime Minister Miyazawa met in Washington, at which time the two leaders agreed to forge a new, multifaceted framework for negotiations over the next three years on bilateral trade, commercial, and economic issues. U.S. and Japanese negotiators have since had a series of talks on this framework, with the intent of reaching agreement by as early as the July 7-9 summit of the Group of Seven (G-7) countries in Tokyo. According to press reports, the United States has proposed a framework that includes macroeconomic objectives such as a reduction in Japan's merchandise trade surplus as a percentage of gross domestic product (GDP) and an increase in the value of foreign manufactured imports into Japan, also as a percentage of GDP. In addition, the United States has suggested that negotiations with Japan focus on baskets of sectoral and structural problems, including (1) Japan's compliance with existing trade agreements; (2) Japanese government procurement; (3) regulatory reform and regulated industries in Japan; (4) Japan's automobile and automotive parts industry in Japan and in the United States; and (5) U.S.Japan "economic integration," which encompasses investment practices, technology transfer, intellectual property rights, emerging technologies, and long-term business relationships. With the Clinton Administration's policy on Japan taking shape, and with the potential for further developments in the bilateral framework negotiations at the upcoming G-7 summit in Tokyo, it is an opportune time for the Subcommittee to hear testimony from Administration officials and from interested public witnesses on U.S.-Japan trade, commercial, and economic relations. This hearing will provide the Administration with a forum in which to brief the Subcommittee on the results of the G-7 summit in Tokyo, both generally, and specifically, with respect to U.S.-Japan relations. In addition, the Subcommittee is interested in hearing testimony from others who wish to provide their views on the U.S.-Japan trade relationship and how the Administration is dealing with it. DETAILS FOR SUBMISSION OF REQUESTS TO BE HEARD: Requests to be heard must be made by telephone to Harriett Lawler, Diane Kirkland, or Karen Ponzurick [telephone (202) 225-1721] by close of business Wednesday, July 7, 1993. The telephone request should be followed by a formal written request to Janice Mays, Chief Counsel and Staff Director, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. Subcommittee staff will notify by telephone those scheduled to appear as soon as possible after the filing deadline, Any questions concerning a scheduled appearance should be directed to the Subcommittee office [(202) 225-3943]. The In view of the limited time available to hear witnesses, the Subcommittee may not be able to accommodate all requests to be heard. Those persons and organizations not scheduled for an oral appearance are encouraged to submit written statements for the record of the hearing. All persons requesting to be heard, whether they are scheduled for oral testimony or not, will be notified as soon as possible after the filing deadline. |