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Building a new Pacific community - President Bill Clinton speech - Transcript
US Department of State Dispatch, July 12, 1993
The Need for a New Relationship With Japan
Our first international economic priority must be to create a new and stronger partnership between the United States and Japan. Our relationship with Japan is the centerpiece of our policy toward the Pacific community. Our two nations account for nearly 40% of the world's output. Neither of us could thrive without the other. Producers in each of our countries are consumers for firms in the other.
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We are also joined in our efforts to address global economic problems. We work closely in an effort to move toward a new trade agreement. And I hope Japan will join in the initiative I proposed just 2 days ago in San Francisco--a meeting of the senior G-7 economic and labor and education advisers to look into a new problem with the global economy. Stubbornly persistent unemployment in the richest nations of the world, even where there is economic growth, is rooted in the inability of so many of these nations to create new jobs.
The economic relationship we have has always benefited both our nations. Americans buy huge volumes of Japanese products. American companies in Japan employ thousands of your citizens. Joint ventures between Japanese and American enterprises advance the economic and other interests of people in both nations. Japanese companies have opened many manufacturing firms, sales offices, and other facilities in the United States.
In the 1980s, when my country went on a huge debt binge, massively increasing public and private debt, Japanese purchases of much of that debt helped to keep our economy going and helped to prevent our interest rates from exploding.
U.S.-Japan Trade
Still, our economic relationship is not in balance. Unlike our relations with all other wealthy nations, we have a huge and persistent trade deficit with Japan. It usually exceeds $40 billion with a deficit in manufacturing products in excess of $60 billion, in spite of the fact, that in recent years, our manufacturing productivity has increased very greatly.
It is impossible to attribute this trade imbalance solely to unfair Japanese barriers from governmental policies or a unique distribution system. Indeed, it is in part simply a tribute to Japanese abilities to produce high-quality, competitively priced goods and to the skill of Japanese businesses in piercing so many overseas markets including our own.
Yet, it is clear that our markets are more open to your products and your investments than yours are to ours. And it is clear that governmental policies consistently promoting production over consumption, exports over domestic sales, and protections of the home market contribute to this problem. The trade deficit is on the rise this year even with the market rise of the yen against the dollar. Though American purchases of Japanese products have remained fairly constant, Japanese purchases of American products have dropped markedly, as a consequence of slow growth here in your economy with no offsetting government policies to stimulate demand.
