Statement on the Japan-United States Trade Negotiations

Last year the United States and Japan launched a new cooperative endeavor in economic policy called the Structural Impediments Initiative. This initiative is designed to address underlying structural problems in both of our economies with the goal of contributing to more open and competitive markets and to the reduction of payments imbalances. A joint working group was formed to identify and solve these problems. Over the past year, these discussions have demonstrated the constructive and cooperative spirit which characterizes the relationship between our two countries.

The joint report of the SII working group has just been issued in Tokyo, following up an interim report issued in April. I welcome and endorse this joint report. Both countries have identified structural impediments, taken initial corrective actions, and made commitments to take further steps to resolve a wide range of structural problems. We expect that the structural policy actions to be taken will have a positive effect on our economies, encouraging open and competitive markets, promoting sustained world economic growth, contributing to a reduction in global payments imbalances, and enhancing the quality of life in both Japan and the United States. Although our efforts on SII are bilateral, the effects will be beneficial for the entire world.

I particularly welcome the clear commitment by Japan to reduce further its current account surplus and view the SII process as an important framework in which the underlying causes of trade imbalances can be removed.

Removing structural impediments is a two-way street. As Japan tackles its structural problems, so must the United States. In particular, I look forward to working closely with the Congress on efforts to strengthen both public and private saving and to reduce our budget deficit through the negotiations now underway.

Both our governments recognize that further effort will be necessary in order to address fully these structural problems and to maintain the momentum of our adjustment efforts. I am pleased that an effective follow-on mechanism has been established. Continuing success on SII can help us move away from trade disputes, thus allowing us to focus our efforts on more positive activities as we continue to develop a global partnership between our two countries.

The personal efforts of Prime Minister Kaifu were responsible in large measure for the substantial progress on our joint effort to address these structural problems. I commend Prime Minister Kaifu for his strong and courageous political leadership. I look forward to a full range of discussions with Prime Minister Kaifu when we meet July 7 in Houston.