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THE WHITE HOUSE

Office of the Press Secretary

                         BACKGROUND BRIEFING
                                 BY
                   SENIOR ADMINISTRATION OFFICIAL

April 16, 1993

The Briefing Room

3:40 P.M. EDT

MS. MYERS: The following is a BACKGROUND BRIEFING. The briefers will be [names deleted].

SENIOR ADMINISTRATION OFFICIAL: Hi. I'll give you a brief rundown of the nature of the meeting -- the nature of each of the segments of the atmosphere, then of the issues that were discussed, and then we'll just do questions.

There were three segments to the discussion. There was a discussion between the President and the Prime Minister of about 35 minutes as the -- roughly one-on-one as the opening. That was then broadened and joined by Secretaries Christopher and Bentsen, and by the Vice President for a discussion that extended approximately an hour. At which point, joined by Bentsen, Christopher, Rubin, Lake, Kantor, Armacost, et al, there was a lunch with the Prime Minister's party in the Old Dining Room in the White House.

The atmosphere was friendly, reserved, down to business. Since they had met before and talked on the phone, there was an immediate capacity to move directly to the issues of business.

The issues that the President discussed and underlined were the following:

First of all, he indicated his desire to define a new partnership in terms of the long-term relationship with the government -- with Japan and the government of Japan. He stressed the same three aspects of the relationship that have always been the sustaining parts of the relationship and that he underlined during the press conference: the security aspect, the global collaborative issues -- cooperative issues aspect, and the economic aspect.

He indicated and underlined that now with the end of the Cold War and with the changes in all of our economies, that the economic issue had to be raised to the fore. In that context, he underlined the need on a macroeconomic level for the government of Japan to make a long-term commitment to growth and welcomed the stimulus package that the government of Japan has just been introduced as a very welcome first step.

He went on to say that particularly because -- both because now the balance, the surplus still remains substantial and if the recession in Japan continues -- will probably grow somewhat -- that it is important to also focus on sectoral issues and on structural issues. And he and the Prime Minister agreed to set up a framework for the discussion of sectors and structural issues within the next three months, i.e. by the G-7 meetings, and then to move onto specific discussions thereafter.

Beyond the economic issues, the Prime Minister and the President agreed on the significance and the strength of the security relationship. And they spent sometime discussing the global cooperative issues -- in particular, the environmental issue. And finally, they ran through and discussed the principal outstanding foreign policy issues of the day.

That's all that I'll comment on at this point. And I'll be happy to take questions.

Q Did the President ask the Prime Minister to increase the amount of stimulus that Japan has promised already? And did he ask him also to agree ultimately to set targets for specific sectors? And what did the Prime Minister say?

SENIOR ADMINISTRATION OFFICIAL: The President did not ask that the Prime Minister increase the stimulus. He welcomed the stimulus as a first step, and rather focused on the need for a longterm plan for growth in the Japanese economy, mentioning the fact that the United States government, as he said in the press conference, had begun the process of getting its macro house in order and was focusing on the long-term growth path and that the government of Japan needed to do the same thing.

Q And targets?

SENIOR ADMINISTRATION OFFICIAL: He did not raise the need for targets in specific sectors. That issue was mentioned in the private meetings in precisely the way that the President stated it in the press conference, which is to say that there's no point papering over the disagreement. The government of Japan has stated that it does not agree with market share indicators or temporary quantitative indicators, and the President, on his part and the remaining senior members of the government, have all stated that one doesn't have agreements that aren't intended to lead to results and that measures of success are going to be something that we'll be looking at and looking for.

Q Should we take that to mean that there's not going to be any effort to negotiation on this question of targets; that you've agreed to disagree on it and you're going to move on to some other ways to try to resolve those kinds of --

SENIOR ADMINISTRATION OFFICIAL: No, absolutely not. I think, had we not mentioned it, you could say that it had been left off the table. But the point of the President saying it was that we do not believe that agreements that are not intended to arrive at progress and, therefor, for which progress is not measured in some way are plausible agreements.

Q Does that mean that the President, when Mr. Miyazawa said that a trade relationship cannot be based on managed trade, that the President disagrees with that?

SENIOR ADMINISTRATION OFFICIAL: The President said, and he feels very strongly about this, that it is really quite important, given the growing complexity of the nature of trade relationships and combined trade and investment relationships, not to slot things into the category of something that is either protectionist and managed, or it's free -- that there are more complex issues. And that what the President has felt and what the senior members of his government have all stressed is that it is important to be able to measure progress in areas that one comes to agreement about.

Q Will the issue of targets and how to set them and the disagreements the Japanese may have with that -- is that something that will be worked out in this discussion over the next few months in the framework of how to address issues structurally?

SENIOR ADMINISTRATION OFFICIAL: I think targets is the wrong word. How one measures success will be an issue.

Q Was there any discussion of that or any sense of compromise on the Japanese side?

SENIOR ADMINISTRATION OFFICIAL: The President stated that in the course of this framework, sectors and structural issues will be considered, and that it is important to us to be able to measure the results of those agreements. The Prime Minister underlined his disagreement with quantitative indicators. Our view is that those are not the only ways -- that those cannot be precluded in all circumstances, as the President has said in the past; that the success of the semiconductor agreements suggest that there are special circumstances where that is possible, and that there are also other measures that are possible.

Q Did the subject of funding -- Japanese funding for the super collider and the space station come up?

SENIOR ADMINISTRATION OFFICIAL: Neither were raised in any discussion that I was part of.

Q Was there a reason? I mean, in the past, or past administrations have pushed for Japanese funding, at least for the super collider. Was there a reason you didn't this time?

SENIOR ADMINISTRATION OFFICIAL: There is a philosophical reason and a point about the new partnership that the President is proposing for why sets of issues were raised rather than why a particular issue wasn't raised. And here that is: The President believes strongly that the economic leg of the stool has to be raised to the forefront and has to be the focus of our attention now and in the immediate future. Therefore, it is important to us and it is important in the nature of our communications to the government of Japan that we make that point clear rather than provide a long sort of menu of things that we care about without indicating priority.

Q Why should this new framework agreement be viewed just as a warmed-up omelette made up of old provisions from the -- talks and the structural impediments? There doesn't seem to be anything new here. What's different about it?

SENIOR ADMINISTRATION OFFICIAL: It's been 12 years. It's nice to be back. (Laughter.) It is new in the following significant respects. First of all, a clear understanding that with the end of the Cold War, that security begins to take on a different meaning and that the importance of economic issues is raised in the mix of what security and what is important to sustain a long-term relationship means. So the President has specifically raised to a greater degree -- a considerably greater degree -- the significance of the economic aspect of our relationship. That's first.

The second is that the President is personally committed to personal involvement in the new partnership. The President and the Prime Minister agreed to meet twice a year.

The third is that the President is committed to the success of this effort to establish a framework and to being personally involved in those efforts and discussions as they go on.

The fourth is that this is a long-term issue. This is not a strategy organized for the purposes of this meeting.

Q Specifically, what did the Prime Minister agree to do between now and the July 7th summit? And what did he agree to do after that?

SENIOR ADMINISTRATION OFFICIAL: The Prime Minister agreed to join us in a set of discussions to establish a framework for structural and sectoral discussions which -- the framework would be established by the summit; the discussions would occur thereafter.

Q Could you comment on whether Ambassador Kantor gave the President a list of those trade agreements that the Japanese are now in violation of, and which sectors were discussed between the President and the Prime Minister?

SENIOR ADMINISTRATION OFFICIAL: Ambassador Kantor --I'm trying to remember the discussions -- Ambassador Kantor would, as you'd expect, has provided the President with a view of the sectors in which there are currently extant agreements and discussions, as well as the issues about which moving forward -- as well as indicating that there will almost certainly be other areas that we want to discuss. And the purpose for that was to underline for the President that in the discussions that go forward, we don't want either to ignore the discussions and agreements -- the discussions that are already occurring and the agreements that already exist or to omit mentioning in this first discussion with the Prime Minister that there will be other issues.

Q He didn't identify which segment?

SENIOR ADMINISTRATION OFFICIAL: He ran through the same set of sectors that he mentioned in the conference.

Q Does that mean that the Japanese are in violation of those trade agreements?

SENIOR ADMINISTRATION OFFICIAL: No, he ran through those as backdrops. He didn't comment one way or the other on those issues. He ran through those sectors as a backdrop as part of the discussion with the Prime Minister about what we had in mind in terms of the framework discussions.

Q Further on the super collider, granted that it wasn't discussed, is there any reason to believe at this point, for the U.S. government to believe that there is any real possibility that the Japanese will make a large contribution to this project?

SENIOR ADMINISTRATION OFFICIAL: I can't comment on that. It wasn't discussed in the meeting.

Q The President several times in the joint news conference pointed to the computer chips agreement as kind of a model that he would like because it did have a numerical target and it was reached. On the other hand, the Japanese have made very clear that they look upon this as an aberration and don't want to repeat it. You said that there may be other ways to measure progress than to have this kind of quantitative measurement at the end of certain period. Can you give us any examples of what other methods there might be to still have an objective test --

SENIOR ADMINISTRATION OFFICIAL: The answer is, yes, I can. These are comments that Laura Tyson has made in public and has also discussed with the President, that all of us have -- that, first of all, the President posed the semiconductor agreement and the success related to it as an example of one kind of measure which can be objective. There's no intent on our part to view -- I think we're more sophisticated than that -- to view that that kind of indicator of success or performance is always the right one because markets are different than that, so that other kinds of things can be important and relevant.

For example, the degree to which in procurement, in markets where public procurements matter, the degree to which there is open tendering in specific cases where there are tenders; rate of growth of our exports in a particular sector can be another. The degree to which standards become universalized rather than are so specific to Japan itself that they, in effect, are an informal barrier.

The point of the discussions on this that Laura Tyson has had publicly and of the broader point is that it would be unsophisticated and wrong economically to believe that one standard will fit all markets.

Q After this, Mr. Miyazawa was headed over to the Pentagon for a discussion with the Secretary of Defense. Do you have any indication about whether the U.S. wants to change the security relationship in any way? And, in any case, what's he going to learn at the Pentagon?

SENIOR ADMINISTRATION OFFICIAL: The short answer is, I don't have any idea. The longer answer is that I think that it is the leg of the stool that both of us feel is extremely strong. But to be honest, I'm not going to be in that meeting, and I don't know.

Q Can you tell us anything about this framework? Is this going to be a combination of SII and sector-specific talks, or some new form of --

SENIOR ADMINISTRATION OFFICIAL: It's going to be a combination of sectoral talks and structural talks. But one of the reasons that we want to think of it differently, beyond the fact that it is different, is that it is -- as any economist or businessperson would tell you that you really can't that clearly separate structural issues from sectoral issues. There are structural issues which are quite distinct, like internal competitiveness policy and that sort of thing -- intellectual property law. There are other structural issues which really have to do more with the nature of how services are handled or the nature of an internal distribution system which really cut across markets and involved markets specifically. So one point of this is to not make quite so hard a distinction between the two, but to recognize that structural issues are often imbedded in sectoral ones.

Q When you first started off, you used the term targets and I wasn't clear whether you said the President did or did not use it. Did he in his conversations with the Prime Minister he used the term targets? Did also these sort of alternatives that you're talking about -- were they raised?

SENIOR ADMINISTRATION OFFICIAL: No, the term the President used was measures for success -- indicators of success. And the only point he made is that there are many possible, and we believe that we must make use of them. And that's it.

Q And did Miyazawa -- the President indicated at the press conference that Miyazawa actually brought

SENIOR ADMINISTRATION OFFICIAL: I think that that is the case. I think that at the end of -- that's what my notes indicate -- is that at the end of one of the parts of the discussion on economics the Prime Minister first raised the issue.

Q Can I ask [deleted] a question?

SENIOR ADMINISTRATION OFFICIAL: Yes, I hope so. (Laughter.)

Q Is the shifting of the emphasis of the relationship on to the -- area a good omen for the future relationship, or does it suggest a period of strain ahead?

SENIOR ADMINISTRATION OFFICIAL: I think it's quite natural, in the sense that the Cold War is over and the imbalance in our economic relationship is quite evident, the importance of economics to our security, the fact that this is an area where there have been problems -- I don't think it's a bad omen, I think it means there's a period of activity ahead directed at the areas where we had a little difficulty. I think the spirit at which both sides bring to this leaves me, at least, with confidence we'll work our way through this in good shape. The end result will be to strengthen the third leg of this relationship and we -- they are so mutually reinforcing that without remedial action in the economic area, then we would face problems in the future.

Q You talked about the need for Japan to make a longterm commitment to growth. What framework are we talking -- four years, five years?

SENIOR ADMINISTRATION OFFICIAL: Multiyear. (Laughter.) The question was, when I mentioned the need for a Japanese long-term commitment to growth, what framework did I mean -- two years, four years, and a year time wasn't specified.

SENIOR ADMINISTRATION OFFICIAL: I think it's important to emphasize the fact what we're looking for is domestic demand-led growth. And in the late '80s there was a period of four years in which all growth was domestic demand led and it did produce some adjustment in the external accounts.

SENIOR ADMINISTRATION OFFICIAL: The economies are different. If you look at the way in which this recession in Japan has occurred, that while overall economic activity has declined, domestic demand, consumer demand has declined much more rapidly. And the effect of that is that that means that you get -- there's no other place to get the growth. The growth comes in the export-driven part of the economy. And the point that we have made with respect to macroeconomic policy is that it -- Japanese macroeconomic policy should, in our judgment, involve a long-term commitment to growth and should be, in our judgment, consumer driven.

Q Did the Prime Minister agree to the idea of measures for success, just not agree to the concept of targets?

SENIOR ADMINISTRATION OFFICIAL: The Prime Minister didn't comment on that. He had already made his view about TQI, temporary quantitative indicators, clear.

Q Did MFN for China come up? Was China perhaps one of those countries that Clinton seemed to refer to on the issue of North Korea, possible influence on North Korea with the NPT? And was the Chinese military buildup mentioned as a mutual concern of the two?

SENIOR ADMINISTRATION OFFICIAL: There was discussion of both the issues. That is there was a discussion, as I think the President mentioned in his press conference, on North Korea and the options that are available to us both to achieve a shared objective. It was recognized that China is an important player in that regard and its role in the United Nations and following up any United Nation decision is quite crucial. There was some discussion as well on MFN and views were expressed on the Japanese side that have been expressed in the past.

Q? I was struck by the very first foreign policy point that President Clinton made was on MIAs, God forbid. Does that indicate that he and the Prime Minister talked about that? Does it indicate that they specifically talked about the IMF board meeting coming up in a week or so where Japan may or may not support the Vietnamese loan arrears situation? Did those topics come up? Was a decision reached?

SENIOR ADMINISTRATION OFFICIAL: There was a discussion of MIAs and the President reiterated the sensitivity of Americans about this issue and the importance of clarifying the record. And he described the importance and the character of the mission that General Vessey is undertaking.

Q But they didn't talk about the IMF meeting and Japan's position in it?

SENIOR ADMINISTRATION OFFICIAL: I don't believe so.

Q Was there a discussion of the Uruguay Round?

SENIOR ADMINISTRATION OFFICIAL: There was a discussion of the Uruguay Round and both leaders expressed a desire to do what's necessary to bring it to a successful conclusion. Ambassador Kantor indicated our own desire to lend some real momentum to that through trade talks that are scheduled to take place in the coming weeks, focusing particularly on market access issues, services issues, further movement on agriculture as well.

Q framework discussions being played out over the next few months, how will President Clinton be involved, what level will those discussions take place?

SENIOR ADMINISTRATION OFFICIAL: The first thing that we'll do is discuss schedule, methods, I've already said timing, and I don't know the answer to that question. But the President has indicated that he wants to be -- he wants this brought back to him on a regular basis.

Q Has he appointed someone to take charge of it?

SENIOR ADMINISTRATION OFFICIAL: My impression is that we'll proceed the way we have. That in setting up the review of Japanese policy, we have had a subcommittee, an interagency group that focused on the Japanese economic issues that has been led by Roger Altman; and that when we turn to specific discussions and negotiations, those will be led, as they should, to the Special Trade Representative.

THE PRESS: Thank you.

END4:05 P.M. EDT