United States. Congress. House. Committee on Inter.

U.S.-Japan relations and American interests in Asia : hearings before the Subcommittees on International Economic Policy and Trade, and Asia and the Pacific of the Committee on International Relations, House of Representatives, One Hundred Fourth Congress, first session, October 25 and 30, 1995 online

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Online LibraryUnited States. Congress. House. Committee on InterU.S.-Japan relations and American interests in Asia : hearings before the Subcommittees on International Economic Policy and Trade, and Asia and the Pacific of the Committee on International Relations, House of Representatives, One Hundred Fourth Congress, first session, October 25 and 30, 1995 → online text (page 1 of 21)
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U.S.JAPAN RELATIONS AND
AMERICAN INTERESTS IN ASIA



Y 4. IN 8/16: R 27/3

U.S. -Japan Relations and Anerican I...

HEARINGS

BEFORE THE

SUBCOMMITTEES ON
INTERNATIONAL ECONOMIC POLICY AND TRADE

AND
ASIA AND THE PACIFIC

OF THE

COMMITTEE ON

INTERNATIONAL RELATIONS

HOUSE OP REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS

FIRST SESSION



OCTOBER 25 AND 30, 1995



Printed for the use of the Committee on International Relations

/

U.S. GOVERNMENT PRINTING OFFICE ^^"N*/'- *>]/

25-481 CC WASHINGTON I 1996 S^ 1 ^>/w




For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office. Washington, DC 20402

ISBN 0-16-052909-3




U.S.-JAPAN RELATIONS AND
AMERICAN INTERESTS IN ASIA



Y 4. IN 8/16: R 27/3

U.S. -Japan Relations and Anerican I...

HEARINGS

BEFORE THE

SUBCOMMITTEES ON
INTERNATIONAL ECONOMIC POLICY AND TRADE

AND
ASIA AND THE PACIFIC

OF THE

COMMITTEE ON

INTERNATIONAL RELATIONS

HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS

FIRST SESSION



OCTOBER 25 AND 30, 1995



Printed for the use of the Committee on International Relations





S,



, Woffi



* p n*



U.S. GOVERNMENT PRINTING OFFICE ^"»w ty

25-481 CC WASHINGTON : 1996 V^' ^^f J

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-052909-3



COMMITTEE ON INTERNATIONAL RELATIONS
BENJAMIN A. OILMAN, New York, Chairman



WILLIAM F. GOODLING, Pennsylvania

JAMES A. LEACH, Iowa

TOBY ROTH, Wisconsin

HENRY J. HYDE, Illinois

DOUG BEREUTER, Nebraska

CHRISTOPHER H. SMITH, New Jersey

DAN BURTON, Indiana

JAN MEYERS, Kansas

ELTON GALLEGLY, California

ILEANA ROS-LEHTINEN, Florida

CASS BALLENGER, North Carolina

DANA ROHRABACHER, California

DONALD A. MANZULLO, Illinois

EDWARD R. ROYCE, California

PETER T. KING, New York

JAY KIM, California

SAM BROWNBACK, Kansas

DAVID FUNDERBURK, North Carolina

STEVEN J. CHABOT, Ohio

MARSHALL "MARK" SANFORD, South

Carolina
MATT SALMON, Arizona
AMO HOUGHTON, New York

Richard J. Garon, Chief of Staff
MICHAEL H. Van Dusen, Democratic Chief of Staff



LEE H. HAMILTON, Indiana

SAM GEJDENSON, Connecticut

TOM LANTOS, California

ROBERT G. TORRICELL1, New Jersey

HOWARD L. BERMAN, California

GARY L. ACKERMAN, New York

HARRY JOHNSTON, Florida

ELIOT L. ENGEL, New York

ENI F.H. FALEOMAVAEGA, American

Samoa
MATTHEW G. MARTINEZ, California
DONALD M. PAYNE, New Jersey
ROBERT E. ANDREWS, New Jersey
ROBERT MENENDEZ, New Jersey
SHERROD BROWN, Ohio
CYNTHIA A. McKINNEY, Georgia
ALCEE L. HASTINGS, Florida
ALBERT RUSSELL WYNN, Maryland
MICHAEL R. McNULTY, New York
JAMES P. MORAN, Virginia
VICTOR O. FRAZER, Virgin Islands (Ind.)



(ID



Subcommittee on International Economic Policy and Trade

TOBY ROTH, Wisconsin, Chairman

JAN MEYERS, Kansas SAM GEJDENSON, Connecticut

DONALD A. MANZULLO, Illinois MATTHEW G. MARTINEZ, California

SAM BROWNBACK, Kansas MICHAEL R. McNULTY, New York

STEVEN J. CHABOT, Ohio ROBERT G. TORRICELLI, New Jersey

DANA ROHRABACHER, California HARRY JOHNSTON, Florida

DOUG BEREUTER, Nebraska ELIOT L. ENGEL, New York
CASS BALLENGER, North Carolina

EDMUND B. RICE, Subcommittee Staff Director

JOHN Scheibel, Democratic Professional Staff Member

CHRISTOPHER HANKIN, Professional Staff Member

Alexander Q. Schmitz, Staff Associate



Subcommittee on Asia and the Pacific

DOUG BEREUTER, Nebraska, Chairman
EDWARD R. ROYCE, California HOWARD L. BERMAN, California

DANA ROHRABACHER, California EN1 F.H. FALEOMAVAEGA, American

JAMES A. LEACH, Iowa Samoa

JAY KIM, California SHERROD BROWN, Ohio

MARSHALL "MARK" SANFORD, South ROBERT E. ANDREWS, New Jersey

Carolina SAM GEJDENSON, Connecticut

DAN BURTON, Indiana GARY L. ACKERMAN, New York

DONALD A. MANZULLO, Illinois

MICHAEL P. ENNIS, Subcommittee Staff Director

RICHARD KESSLER, Democratic Professional Staff Member

DAN MaRTZ, Professional Staff Member

JON J. Peterson, Staff Associate



(HI)



CONTENTS



PART I— U.S. JAPAN RELATIONS AND AMERICAN INTERESTS LN ASIA:
STRIKING A NEW BALANCE

Wednesday, October 25, 1995

WITNESSES

Page

The Honorable Winston Lord, Assistant Secretary of State for East Asian

and Pacific Affairs, Department of State 4

The Honorable Joseph S. Nye, Jr., Assistant Secretary of Defense for Inter-
national Security Affairs, U.S. Department of Defense 8

The Honorable Richard L. Armitage, President, Armitage Associates 20

Dr. James E. Auer, Director, Center for U.S.-Japan Studies and Cooperation,
Vanderbilt University 22

Dr. Kenneth B. Pyle, President, National Bureau of Asian Research 25

APPENDIX

Prepared statements and biographical sketches:

Hon. Howard L. Berman, a Representative in Congress from the State

of California 73

Hon. Winston Lord , 74

Hon. Joseph S. Nye, Jr 95

Hon. Richard L. Armitage 103

Dr. James E. Auer 107

Dr. Kenneth B. Pyle 112

Article (The Context of APEC: U.S.-Japan Relations") submitted for
the record by Dr. Kenneth B. Pyle 118

Statement submitted for the record in lieu of appearance by Dr. Kent
E. Calder, Director, Program on U.S.-Japan Relations, Princeton Uni-
versity 137

PART H^JAPAN'S UNCERTAIN POLITICS AND ECONOMY

Monday, October 30, 1995
WITNESSES

Dr. Robert Alan Feldman, Managing Director, Salomon Brothers Asia, Ltd.,

Tokyo, Japan 40

Dr. Leonard Schoppa, Assistant Professor, Department of Government and

Foreign Affairs, University of Virginia 44

Dr. Merit E. Janow, Professor — International Trade, School of International

and Public Affairs, Columbia University 48

Dr. William R. Farrell, Advanced Research Fellow, Program on U.S.-Japan

Relations, Harvard University 52

APPENDIX

Prepared statements and biographical sketches:

Dr. Robert Alan Feldman 153

Dr. Leonard Schoppa 163

Dr. Merit E. Janow 172

Dr. William R. Farrell 188

(V)



U.S.-JAPAN RELATIONS AND AMERICAN

INTERESTS IN ASIA:

STRIKING A NEW BALANCE— PART I



WEDNESDAY, OCTOBER 25, 1995

House of Representatives,
Committee on International Relations,

Subcommittee on Asia and the Pacific,

Washington, DC.

The subcommittee met, pursuant to call, at 2 p.m. in room 2172,
Rayburn House Office Building, Hon. Doug Bereuter (chairman of
the subcommittee) presiding.

Mr. Bereuter. The subcommittee hearing will come to order.
Good afternoon, ladies and gentlemen. Today s hearing is intended
to examine the overall U.S. -Japan relationship against a backdrop
of a changing post-cold war Asia-Pacific region. On October 30, we
will hold a second more narrowly focused hearing that will examine
recent political and financial instability in Japan and the implica-
tions for U.S. interest.

Our objective today is to elicit testimony in the current climate
of partnership and competition the respective roles of the United
States and Japan in the Asia-Pacific region. I am especially inter-
ested in the extent to which Japan continues to share the U.S. per-
spective on a variety of important Asia-Pacific issues. I am inter-
ested in where we should strike the balance in our bilateral ties,
both among competing American policy objectives and between our
relations with Japan and other regional states.

Regrettably, this hearing is even more timely than we would
have wished due to the uproar in Japan over the alleged rape of
a 12-year-old girl by three U.S. servicemen in Okinawa. We would
all agree that this is a deeply shocking and troubling incident in
its own right, but the public reaction in Okinawa and Japan raises
new questions about the political basis on which the U.S. forward-
based strategy rests.

I appreciate very much the effort that all of our witnesses have
made to participate in this hearing today, since the hearings origi-
nally had been scheduled for October 16th, the day of the march
on Washington.

Our former distinguished ambassador to Tokyo, Mike Mansfield,
was famous for repeating frequently that the U.S. -Japan relation-
ship was our single most important bilateral relationship bar none.
I for one continue to regard our relationship with Japan as ex-
tremely critical to the American national interest. Although the
threats to U.S. security and other interests in Asia may be less

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starkly apparent than during the cold war era, they continue to be
real ones nevertheless.

Japan remains our most logical security partner in the region
and contributes more than any other ally to the support of U.S. for-
ward-deployed forces. Not withstanding our complaints about Japa-
nese trade barriers, Japan is still our single largest export market
in Asia by a wide margin. Our exports to Japan totaled $53.5 bil-
lion in 1994, more than twice that of any single European country.
They were exceeded only by exports to Canada and Mexico. Japan
continues to broadly share U.S. values and goals for the function-
ing of the international system. This said, a number of develop-
ments in recent years have proved troubling and raise doubts about
where our relations may be headed.

Fifty years after the end of the Second World War, we can con-
gratulate ourselves on the durability of our alliance. Nevertheless,
we cannot take it for granted. The cold war has ended and some
of the sense of mutual dependency may have gone with it. We, on
our part, may feel freer to discuss and engage in trade negotia-
tions, even protracted and heated ones, with less concern about
negative impact on our political and security interests.

Japan likewise has shown more inclination to resist U.S. market-
opening pressures. One contributing factor may be that, for both
countries, trade with the rest of Asia in combination recently has
become greater than the volume of our trade with each other.

I congratulate Assistant Secretary Nye for the articulate reiter-
ation of the American commitment to the alliance and the forward
deployment of American forces in Asia. I strongly support this im-
portant deployment and said so very directly at our first sub-
committee meeting this vear.

Nonetheless, many of our constituents are asking whether our
security role in Asia, including our deployments in Japan, serve
Japanese interests more than our own. I certainly do not believe
that is the case for reasons I have already noted, but in the eyes
of many Americans, our security commitment to Japan needs a
more persuasive revalidation than has yet been offered. Because of
the Okinawa incident, Japanese political leaders have a similar
task to mobilize public opinion in support of the alliance.

During the late 1980's, in the full flush of Japan's burgeoning
trade surpluses, Tokyo appeared eager to play a larger global, polit-
ical, and economic role as a partner of the United States. During
the Persian Gulf War, however, Japan contributed $13 billion to
the allied cause but otherwise proved a reluctant partner. Japan's
participation in U.S.-led efforts to combat North Korea's nuclear
threat and deter war on the Korean peninsula remains a key ele-
ment of our post-cold war cooperation. Frankly, however, questions
do remain about the extent of Japan's commitment to our common
objectives, especially if this should involve a showdown with
Pyongyang.

Although some significant strides have been made in defense
burden snaring and in passing of the landmark peace cooperation
law in 1993, Japan's overall international role seems limited by
weak political leadership. As I said, at the end of the month, we
will have a hearing that focuses more directly on recent political
and financial instability in Japan.



But in a broader sense, Japan still seems unduly reluctant, in
this member's opinion, to play an international role commensurate
with its economic importance. Instead it still seems to prefer to
lead from behind and to pursue the narrower goals of its powerful
bureaucratic ministries.

In this respect, I, like many other Americans who follow these
matters, will be watching closely to see how Japan handles its re-
sponsibilities as host of this year's APEC ministerial meeting and
leaders summit. It remains to be seen whether Japan shares Amer-
ican perspectives about the need to adopt a concrete plan of action
for APEC, including, I emphasize, the APEC commitment to push
free trade in agriculture.

Or, on the other hand, will Japan align itself with several other
Asian countries that oppose the free trade objectives adopted at
last year's meeting in Bogor, Indonesia? Will Japan propose an
agenda that moves the ball forward? Or will it punt, leaving impor-
tant issues to be addressed next year in Bangkok? Thus far, re-
ports do not make us optimistic.

I would mention that Mr. Berman, the ranking minority member
and gentleman from California and I, as well as 19 other members,
are today sending a letter to Secretary Christopher and Ambas-
sador Micky Kantor expressing our concerns. We voice our support
for a strong effort on their part to ensure that the commitments
made in Bogor are in fact implemented and that there is no back
sliding in that respect. This will be delivered to these distinguished
members of the Administration this afternoon.

Also on the economic side, Japan has turned in a disappointing
performance in terms of its global responsibilities. Four years of re-
cession in Japan have created significant distortions in the global
economy. Until very recently, Japan's exploding trade surpluses
with the United States and the world have been based more on de-
pressed import demand than on rapid export growth.

Although U.S. exports to Japan grew by more than 11 percent
in 1994, they only grew by an average of 7.5 percent during the
previous 5 years. The inability of Japan's financial managers to get
the economy moving probably has contributed more recently to the
growth of the U.S./Japan trade deficit than has Japan's diverse and
damagingly effective trade barriers.

With regard to bilateral trade negotiations under the economic
framework talks, Japan has clearly become more assertive about
saying no to the United States. We now have the specter of the
newly elected President of the Liberal Democratic Party, having
gained that office in part by his toughness in trade negotiations
with the United States. That fact alone seems to reflect a new
mood in Japan and the cumulative effect of rising dislike for Amer-
icans among opinion makers and a significant segment of the Japa-
nese public.

These remarks are not intended to represent a bill of particulars
against Japan. On the contrary, these developments need to be
seen as troubling elements of what on the whole is a remarkably
successful relationship. I look forward to beginning a full discussion
of these developments and factors this afternoon.



Before I introduce our distinguished witnesses on the first panel,
I would like now to turn to my distinguished colleague, the gen-
tleman from California, Mr. Berman, for his remarks.

Mr. Berman. Well, thank you, Mr. Chairman. My prepared re-
marks cover some of the very same issues, some of the issues that
you raised and I think just in order to save some time, we have
five witnesses, and have enough time for questioning I will just ask
that that statement be included in the record and add this time to
my question time later.

Mr. Bereuter. Thank you very much, Mr. Berman. And I would
say, I think- — while I am knocking on wood here — that we are in
for a rare luxury of having no votes the rest of the afternoon. So
we should be able to have a very good opportunity for testimony
and for questions. Given the importance of the issues that I have
outlined — an assessment that, in whole or in part, Mr. Berman ap-
parently snares, we are fortunate to have two very strong panels
to address them.

The first panel consists of the Assistant Secretary of State, Win-
ston Lord, and the Assistant Secretary of Defense, Joseph S. Nye.
Both have appeared at previous hearings of this subcommittee and
need no recitation of their distinguished backgrounds and numer-
ous accomplishments.

But I do want to thank both of you distinguished gentlemen for
the excellent testimony you have offered in the past before this
subcommittee and the full committee, and for the cooperative way
that you have extended your assistance to this member and to all
the members of the subcommittee. I do thank you for an entirely
positive relationship; cooperative examples like yourself would be
hard to replicate.

I would like now, before I introduce the second panel, iust to
hear from our first two distinguished witnesses. I would call upon
Secretary Lord unless you have a different order in mind. Mr.
Lord, I am going to suggest the usual 5 or 10 minutes. You can
summarize or use your statement as you wish. I think we should
have plenty of time for you to cover your remarks in one fashion
or another. Please proceed as you see fit.

STATEMENT OF THE HONORABLE WINSTON LORD, ASSISTANT
SECRETARY OF STATE FOR EAST ASIAN AND PACIFIC AF-
FAHIS, U.S. DEPARTMENT OF STATE

Mr. LORD. Thank you, Mr. Chairman. I will submit the full re-
marks for the record and give you some excerpts. Let me begin by
reciprocating the very generous comments you make. I am sure I
would speak for Joe Nye as well to say that we have found very
refreshing and stimulating and helpful with a series of hearings
that this committee is conducting on East Asian policy and the pro-
ductive manner in which you conduct these hearings. I think it is
contributing to the national debate and our national interest. And
it is a pleasure to be back here again.

I may also note that Joe Nye and I will be traveling with Sec-
retary Perry to Japan as well as South Korea next week.

The U.S.^Japan relationship is always an important topic. I think
it is particularly timely for the reasons suggested in your opening
statement and what I take to be some of Congressman Berman's



statements as well. Our relations with Japan, as you said, have
been called our most important bilateral relationship and this has
not changed. And let me say that many of your themes in your
opening remarks, both the analysis and tne implied policy prescrip-
tions, the Administration would fully endorse.

I do believe the United States and Japan's interests are predomi-
nately congruent, as you said remarkably successful, a partnership
despite some problems and I believe they will continue to be so in
the years to come. We share an interest in global peace and secu-
rity. Our diplomatic coordination is close and fruitful. Our agenda
and global issues are broad and growing. The U.S. -Japan alliance
basea on the treaty is essential to the defense of both countries, a
central element of our policy of forward deployment and contrib-
utes directly to security and prosperity throughout the region.

It is absolutely crucial to our presence and to our continuing in-
fluence in the Western Pacific and Asia and I might add it is
warmly welcomed by the countries of the region.

Moreover, the United States and Japan as enormous economic
actors share a responsibility for the well being of the world econ-
omy and I mentioned how we were in frequent contact on global
economic management and various international institutions.

Naturally, we have some differences with Japan. This is to be ex-
pected in a relationship as large and as active as ours and they
particularly arise in the trade area, of course.

We have had success on some of the framework for economic
partnership and there and elsewhere under the Uruguay round we
have resolved about or made progress on 20 sectorial and struc-
tural trade issues. There have also been some steps taken by the
Japanese to stimulate their economy and American economic front,
but this is unfinished business and both countries must continue
to address and resolve issues of this sort constructively as they
arise so that they do not hamper not only the rich commerce but
the overall ties between the United States and Japan.

And finally, we have common values as well as interests, a
shared commitment to freedom, democracy, promotion of human
rights and the rule of law, both in our own societies and in relation
to other countries. And it is the vision of the world based on these
principles that lies at the center of the excellent relations between
our two nations.

My statement then goes on to describe the domestic political
scene in Japan as well as recent economic trends. And for the sake
of time and the fact that you will be focusing on this in particular
in a couple of days, I will not comment on that in my verbal re-
marks except to end up by saying that the political realignment,
of course, has affected the decisionmaking process in Japan, includ-
ing on issues of interest to the United States. But we have no rea-
son to expect change in Japan's basic policy of strong support for
our alliance and U.S. -Japan cooperation in general.

Again, I cite some of the economic trends and end up by saying
that although Japan faces challenges in deregulating and stimulat-
ing its economy, its economic fundamentals remain strong and I ex-
plained that Japan's long-term economic prospects remain good. It
is and will remain a central economic partner for the United States
and we are hopeful that Japan will enjoy more rapid growth in



1996 and that with that growth U.S. exports and goods and serv-
ices to Japan will rise.

In short, Japan is in a period of political change and it is grap-
pling with economic problems that are not trivial. However, we ex-
pect U.S.-Japan ties to remain strong and the Japanese continue
to support close relations and cooperation between the United
States and Japan. But this reservoir of good will is not something
which we can take for granted as you yourself suggested. It needs
to be nurtured lest it dwindle.

I then address the security situation and again the Assistant
Secretary and I will go into this in considerable detail. So I will be
very brief. But I wish to emphasize again that this alliance based
on our treaty of cooperation and security is the key to continuing
U.S. influence throughout East Asia. It also directly contributes to
the security and economic well being of the American people. The
presence of our 47,000 military personnel in Japan combined with
the home port of Seventh Fleet ships personnel allow us to contrib-
ute to the maintenance of stability in the region, full store regional
arms competition, including nuclear arms and exercise influence
over the course of events. It is a platform for not only deployment
but activities elsewhere in the region. And it underpins a strong
diplomatic partnership allowing us both to better manage our rela-
tions with other Asian countries and indeed the world.

I then describe, and I am sure Mr. Nye will go into this, an in-
tensive security dialog we have been conducting with Japan for the
last year and a half. We thought it particularly appropriate in the
post-cold war environment, the 50th anniversary of World War II,
to reexamine and reaffirm our alliance and Joe Nye and I and our
deputies have had a series of meetings.

This culminated in what we called a two-plus-two meeting in late
September in New York where for the first time ever the Secretar-
ies of State and Defense and their counterparts met, not only to
push forward our cooperation and our examination and affirmation
of our alliance, but they also welcome the signing of a special meas-
ures agreement which will help contribute to the costs of our forces
there and this now will be about $5 billion annually or 70 percent
of the cost to us — more provided than by any other ally and in fact
more than the amount provided by all other allies combined. It is
less expensive for us to maintain forces in Japan than here at
home.

So we think there is a very good case to be made, both to the
Japanese and American people on the continuing importance of
this alliance and we expect to do that as one of the highlights of
the President's trip to Japan in November, not only for APEC but
his State visit afterwards to Tokyo and we are working on a dec-
laration of our shared security interest for that trip.

I then discuss the heinous crime, the alleged rape on Okinawa
by three U.S. servicemen. As you know, we have moved quickly to
show our sensitivity to this, both as a horrible incident in itself, but
also its impact on our alliance and I am sure you want to get into
that in your questions. But our top officials from the President on
down have expressed regret and shock.

And I am happy to report that today after some fast and mutu-


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Online LibraryUnited States. Congress. House. Committee on InterU.S.-Japan relations and American interests in Asia : hearings before the Subcommittees on International Economic Policy and Trade, and Asia and the Pacific of the Committee on International Relations, House of Representatives, One Hundred Fourth Congress, first session, October 25 and 30, 1995 → online text (page 1 of 21)