[Title] The Tokyo Declaration on the U.S.-Japan Global Partnership

The President of the United States of America and the Prime Minister of Japan declare:

PREAMBLE

From tragic conflict fifty years ago, Japan and the United States have developed a highly productive and mutually beneficial relationship of close political, security, economic, scientific, and cultural cooperation. The two countries are now highly interdependent at all levels of their societies. They base their cooperation on shared principles of political and economic freedom, democracy, the rule of law, and respect for human rights.

The two countries recognize that this cooperation made an important contribution to weathering the chill of the Cold War era and in promoting four decades of global stability and prosperity.

The two governments recognize that today, in the post Cold War era, new political and economic challenges confront the U.S. Japan relationship. Economic issues have assumed new prominence. To ensure that the U.S. and Japan fully exploit opportunities for cooperation, both countries place the highest priority on taking effective measures to address factors underlying economic friction, with a focus on issues in their trading and investment relations.

Japan and the United States recognize the benefits to their societies of the close cooperation they have enjoyed in the post war period and are committed to building on this foundation to create an even closer partnership. Both acknowledge that a closer relationship must be constructed on enhanced mutual understanding and shared interests. As the two largest market oriented economies and democracies in the world, Japan and the United States accept a special responsibility for shaping the new era.

The two governments therefore resolve to join in a Global Partnership based on these enduring values to help build a just, peaceful and prosperous world and to meet the challenges or the twenty first century.

Cooperation to Promote World Peace and Prosperity

The U.S. -Japan alliance provides the foundation for our Global Partnership. Together, both nations pledge to: work together to maintain world peace and security; promote development of the world economy; support the world-wide trend toward democratization and market-oriented economies; and meet new transnational challenges. To achieve these goals, the two countries will cooperate to strengthen the GATT multilateral trading system; reinvigorate the U.N. organization; advance arms control and the non-proliferation of weapons of mass destruction; assist the-developing world to promote growth and stability; and protect and improve the global environment. The United States and Japan recommit their resources and the talents of their peoples to the purposes of the United Nations Charter.

As nations of the Asia-Pacific region, the United States and Japan are committed to promoting prosperity, reducing tensions, and enhancing political cooperation in the region and to take steps to strengthen the bonds of the Asia-Pacific community while respecting its diversity. To this end, Japan and the United States recognize the Asia-Pacific Economic Cooperation (APEC) framework as the forum for enhanced regional efforts to promote open markets, sustain dynamic economic growth, and build political cooperation.

Japan and the United States will also broaden the scope of their cooperation in the rest of the world, including the Middle East, Central and South America, Africa, and Europe, with particular attention to supporting countries that are in transition to democracy and market economies. The two nations will strengthen cooperation in their respective economic assistance programs in the developing world to promote growth and stability, help reduce the developmental gap between industrialized and developing countries, enhance respect for democratic values and human rights, and ameliorate global problems, including environmental degradation, refugees, illicit narcotics, disease, and aging.

Political and Security Relations

The U.S. and Japan reaffirm their commitments to the 1960 Treaty of Mutual Cooperation and Security which is central to the U. S.-Japan Alliance. This alliance provides the political foundation on which the two countries cooperate in assuming their respective roles and responsibilities for securing world peace and stability in their Global Partnership. The two governments pledge to maintain and enhance the effective operation and credibility of the Treaty and its related arrangements.

As countries with vital interests in the Asia-Pacific region, Japan and the United States recognize the continuing importance of the defense relationship to the peace and stability of this vast and diverse region. The two governments will work closely with others to reduce tensions and instability in East Asia and build regional political cooperation in the post-Cold War environment.

Aware of the need for continuing vigilance as we enter a new era now marked by instability and uncertainty, the United States will maintain the forward deployed forces necessary to preserve peace and stability in the region. Japan, for its part, will continue to make available to the United States, in accordance with the Security Treaty, the use of facilities and areas in Japan and, under the new Host Nation Support Agreement, will bear an increasing share of the costs of stationing these forces in Japan. Both countries will take steps to increase cooperation between their defense forces and enhance the two-way flow of defense technologies. The two countries agree to utilize fully the renewed Security Consultative Committee mechanism to oversee their security relationship.

Economic and Trade Relations

Aware of the high degree of interdependence of their economies and mindful of the need to encourage closer cooperation to promote conditions of sustainable real growth with price stability and employment, the two governments are resolved to enhance openness and oppose protectionism in their commercial, financial, and investment markets. To this end, Japan and the United States will strengthen policy initiatives to reduce structural impediments.

Japan and the United States further pledge to make their economies the most open, productive, and competitive in the world, thereby building a sustainable trade and investment relationship. They will encourage private-sector initiatives to strengthen further exchanges and cooperation between industries in both nations.

Science and Technology

Mindful of their positions as world leaders in scientific research and technical development, the two governments undertake to expand scientific and technical cooperation, including basic research, based on reciprocal access, for the benefit of both societies and the human community. They pledge to increase research on global environmental issues and will take a leadership role in fostering an international consensus on measures to meet this challenge.

Enhancement of Mutual Understanding and Exchanges

Acknowledging that communication and understanding between peoples of both countries are essential to an enduring partnership, the United States and Japan pledge to undertake and support programs which will advance the rich and diverse intellectual, cultural, and public interaction between their two peoples. The two governments will place particular emphasis on language training, intellectual and educational exchanges, and community-level programs designed to increase mutual understanding.

The President and the Prime Minister pledge the full support of their governments to the purposes of this declaration to build the Global Partnership. The two governments will develop new areas of cooperation in support of common geopolitical, economic, and humanitarian objectives in a manner that provides for an equitable sharing of responsibilities and benefits.

GLOBAL PARTNERSHIP PLAN OF ACTION (Part I)

I. Cooperation to promote World Peace and Prosperity

II. Political and Security Relations

III. Cooperation on Environment, Quality of Life, and Science and Technology

IV. Enhancement of Mutual Understanding and Exchanges

As stipulated in the Tokyo declaration issued on the occasion of discussions between Prime Minister Miyazawa and President Bush in Japan in January 1992, Japan and the U.S. are firmly committed to a Global Partnership. In carrying out this partnership, both nations are resolved to take a wide range of actions, including those listed in this Plan of Action.

I. COOPERATION TO PROMOTE WORLD PEACE AND PROSPERITY

(1) Intensification of Political Dialogue

- Promote bilateral political consultations to coordinate further their respective roles and responsibilities.

- Intensify trialogue among Japan, the U.S., and Europe, including political consultations among the G7 countries and political dialogue between Japan and NATO.

(2) Arms Control and Disarmament

- Address the proliferation of weapons of mass destruction and missiles and the transfer of conventional weapons. In particular,

-- Strengthen the Non-Proliferation Treaty regime and IAEA safeguards.

-- Achieve an early conclusion to the negotiations of the Convention on the Prohibition of Chemical Weapons.

-- Strengthen the Missile Technology Control Regime.

-- Strengthen the Australia Group on chemical and biological weapons.

-- Strengthen the nuclear suppliers' export control regime (London Suppliers' Group), including establishment of export control of nuclear-related dual use items.

-- Increase the transparency of the international transfer of conventional weapons, in particular, through the effective operation of the U.N. register.

(3) Cooperation to promote Peace

- Work together to strengthen the United Nations peace-keeping and peace-making functions.

- Expand Japan-U.S. cooperation in the United Nations.

(4) Cooperation to promote Democracy and Freedom

- Support and assist democratization and economic reform in Central and Eastern Europe, Asia, and other areas.

(5) Cooperation to Assist the Developing World

- Acknowledge that the spirit embodied in Japan's new Official Development Assistance (ODA) guidelines, which take into consideration, among others, trends in military expenditure by the recipient countries, as well as efforts for promoting democratization and introduction of a market-oriented economy and conditions of basic human rights by the recipient countries, will enlarge the scope of cooperation between Japan and the U.S.

- Enhance cooperation at all levels on development assistance.

- Encourage American firms to participate further in the tender procedure of Japan's ODA loans, more than 80 percent of which have already been untied. (The procurement of American firms accounted for approximately 5%, or 37 billion yen, of Japan's ODA loan in FY90.) In this regard, organize and support a program to introduce American firms to Japan's ODA as part of an overall effort to strengthen collaboration between their foreign aid systems.

(6) Cooperation on Regional Matters

Asia and the Pacific

- Contribute to the stability, development and openness of the region through realistic and constructive approaches, while respecting historical, cultural and socioeconomic diversities. In particular,

-- Strengthen the Asia-Pacific Economic Cooperation (APEC) as an essential framework for cooperation in the region.

-- Promote political dialogue among Asia-Pacific countries through ASEAN Post Ministerial Conference.

- Encourage China to pursue policies of reform and openness in both political and economic fields, and encourage the Chinese Government to take initiatives for human rights and non-proliferation efforts, recognizing the importance of China's integration into the international community.

- Support Mongolia's democratization and market oriented reform efforts by extending external financial and technical assistance through encouraging an increase in international participation in the multilateral assistance group for Mongolia, which Japan took the initiative to organize and co-chairs.

- Encourage continued progress through the North-South dialogue and welcome the South and North Korea's agreement on Reconciliation, Non-Aggression, and Exchange and Cooperation.

- Ensure that North Korea promptly concludes and fully implements full scope IAEA safeguards.

- Welcome the North-South declaration to create a verifiable non-nuclear Korean Peninsula that foreswears reprocessing and enrichment, and press for the early implementation of this declaration in order to dispel suspicions of North Korean nuclear weapons development.

- Encourage conventional arms control on the Korean Peninsula via the North-South talks.

- Ensure the full implementation of the Cambodian peace settlement, work together for effective United Nations operations, and assist in the reconstruction of Cambodia.

- Promote peace, stability and prosperity in Cambodia, Vietnam and Laos, and support economic and political reform in those countries.

- Encourage the restoration of the democratic process in Myanmar/Burma.

Commonwealth of Independent States

- Extend appropriate and effective assistance to the members of the Commonwealth of Independent States to help them reform their domestic and foreign policies, both economic and political, and to help the governments meet the basic needs of the people. The U.S. will continue to give maximum support to Japan's efforts to resolve people. The U.S. will continue to give maximum support to Japan's efforts to resolve the Northern Territories issue, one of the last vestiges of the Cold War.

- Provide humanitarian, food and medical assistance to meet immediate needs of the new states.

- Assist in converting military production facilities to civil use as part of a broader transition to less military oriented societies.

- Assist in developing appropriate infrastructure, including distribution and energy.

- Work together for the success of the January 22/23 conference in Washington on assistance to the new states which emerged from the breakup of the Soviet Union.

Central and Eastern Europe

- Enhance bilateral consultation as well as cooperation in multilateral institutions, including the International Monetary Fund, World Bank, the European Bank for Reconstruction and Development, and G-24, in order to provide the most effective assistance to Central and Eastern Europe.

- Explore means to assist the countries of the region in their transition to market economies, including diversification of its traditional patterns of trade.

- Cooperate to promote private sector development in the region, through appropriate arrangements coordinated between Japanese institutions and the American Enterprise Funds.

- Enhance cooperation on environment in the region through active participation in the Budapest Regional Environment Center and by developing a scheme designed to mobilize the environmental technologies available in both nations.

Latin America and Caribbean

- Support democratization and market reforms in Latin America and the Caribbean. In particular,

-- Work together for the early start of the Multilateral Investment Fund to support the Enterprise for the Americas Initiative (EAI).

-- Support the Partnership for Democracy and Development (PDD).

-- Cooperate for the reconstruction of El Salvador.

-- Consider further joint efforts to support economic reform in Peru.

-- Continue to provide effective aid to Nicaragua.

-- Ensure that the North American Free Trade Agreement will enhance the global free trading system, will be fully consistent with GATT obligations, and will not raise barriers to third countries in the North American market.

Middle East

- Welcome progress towards a Middle East peace. They both pledge to play major roles in the multilateral phase of the Middle East peace process, and to support the efforts of concerned parties so that the current peace process will result in the achievement of a just, lasting, and comprehensive peace.

- Commit themselves to the full implementation of United Nations Security Council resolutions related to Iraq and reaffirm that its people deserve the opportunity to choose democratically a leadership willing to live at peace with its neighbors.

- Strengthen international efforts for the reconstruction of Lebanon.

Africa

- Support the development of market economies and the democratization process in Africa.

- Assist in natural and man-made emergencies, such as in the Horn.

- Enhance policy coordination to help South Africa transform itself into a democracy based on equality among the races, while taking into account the need to restore growth to its economy through investment and other financial means to encourage the process.

(7) Cooperation to Prevent Terrorism

- Continue to consult on ways of promoting international cooperation to further combat international terrorism, including effective measures in the appropriate international fora. This will include continued counter-terrorism consultations, bilaterally and in the United Nations Security Council and the G7.

II. POLITICAL AND SECURITY RELATIONS

- Continue a close dialogue to ensure the smooth and efficient stationing of U.S. forces in Japan, recognizing that it is important for the U.S. to maintain capable forward deployed military forces at an appropriate level in the region.

- Hold the first security consultative meeting at the earliest opportunity of the Minister for Foreign Affairs and Minister of State, Director-General of the Defense Agency on the Japanese side, and Secretary of State and Secretary of Defense on the U.S. side.

- Promote interoperability, recognizing that complementary defense cooperation is a significant aspect of the bilateral security relationship.

- Enhance defense cooperation, including:

-- Conclude agreement on joint research on the ducted rocket engine, and continue examination of defense technology fields such as fighting vehicle propulsion technology using ceramic materials, millimeter wave/infrared dual mode seekers, closed-loop degaussing for steel-hull ships, and advanced steel for ships and armored vehicles, under the Japan-U. S - Mutual Defense Assistance Agreement.

--Promote further two-way transfer of defense related technology.

--Reaffirm the importance of strengthening early warning and surveillance capabilities. Japan's five year Mid-Term Defense Program states that it will acquire four early warning and control aircraft. Japan will continue to study availability and appropriateness of various aircraft including a new type of AWACS, and the U.S. will assist in this effort.

III. COOPERATION ON ENVIRONMENT, QUALITY OF LIFE AND SCIENCE AND TECHNOLOGY

(1) Environment

- Consult closely on the upcoming United Nations Conference on the Environment and Development (UNCED).

- Strengthen cooperation in preserving the environment, through the following projects:

-- Seek more effective utilization of existing institutions and study the feasibility of helping developing countries build national centers for the management and conservation of natural resources to promote sustainable development through environmental protection and wise use of natural resources in developing countries;

-- Cooperate to reduce natural hazards, in accordance with the International Decade for Natural Disaster Reduction and the Japan-U. S. Science and Technology Agreement, by assisting developing countries to prepare disaster reduction plans, including hazard mapping, risk assessment and the establishment of databases;

-- Cooperate to help conserve and wisely manage world forests, including tropical forests, by negotiating by the time of UNCED an agreement on principles for all types of forest, leading to a framework convention; and by collaborating through appropriate international organizations such as the International Tropical Timber organization (ITTO) for achieving the ITTO Year 2000 Target;

-- Strengthen liaison in the field between Japan Overseas Cooperation Volunteers (JOCV) and U.S. Peace Corps;

-- Cooperate with organizations such as UNEP to facilitate the transfer of environmentally sound technologies to developing countries and countries with economies in transition;

--- Encourage nongovernmental organizations, industry and other private sector groups to contribute to international efforts to preserve the environment; e.g., the upcoming seminar on the global environment in Tokyo in January.

(2) Improving Quality of Human Life

Health

-- Establish a Japan-U. S. Joint Commission on Aging to provide a framework to address a broad range of issues related to aging populations;

-- Engage in cooperative research activities in support of the international Children's Vaccine Initiative.

Narcotics

-- Enhance cooperation to help Southeast Asian nations resolve narcotics problems, in particular, through joint training and information gathering.

-- Support counter-narcotics efforts in Latin America.

-- Hold periodic consultations on narcotics issues.

Refugees

-- Strengthen cooperation, particularly through international organizations on refugee problems, including repatriation of refugees following the resolution of conflicts.

Humanitarian Issues

-- Cooperate on global humanitarian issues, following through on the December 19, 1991 UN General Assembly initiative to improve the UN's worldwide emergency response capabilities.

(3)Cooperation for the Advancement of Science and Technology

Global Change Research

- Reaffirm and strengthen Japan-U. S. commitment to global change research including:

-- Support for regional approaches to global change research and a network of regional global change research institutes.

-- Cooperation in the observation of global change through advanced methods including satellite-remote sensing.

-- Cooperation on international exchange of global change data;

-- Joint efforts in ocean research in the Pacific.

Major International Projects

-- Establish a joint working group to examine technical and other essential aspects of the Superconducting Super Collider (SSC) project and to consider how this project can be formulated as an international project to enable Japan to participate in the project.

-- Promote the Human Frontier Science Program through contributions by participating countries.

--Cooperate in joint research on human genome analysis.

--Ensure success of the International Thermonuclear Experimental Reactor (ITER) engineering design activities.

-- Reaffirm commitment to achieving a permanently-manned capability for Space Station Freedom by the end of the century.

Research and Development on Precompetitive Technologies

-- Engage in feasibility studies on cooperation in precompetitive manufacturing and other advanced technologies, including Intelligent Manufacturing Systems and optoelectronic technologies.

Promotion of Researcher Exchange

-- Commit to further progress in promotion of exchange of scientists and engineers.

(4) Conservation

-Cooperate to conserve and develop high seas fishery resources on a sustainable basis.

-Cooperate to ensure that all members of the international community implement the 1991 UN Resolution on driftnet fishing.

-Collaborate to implement the Convention on International Trade in Endangered Species (CITES), including a successful 1992 CITES Conference of Parties in Kyoto.

IV. ENHANCEMENT OF MUTUAL UNDERSTANDING AND EXCHANGES

-Welcome the establishment of the Japan Foundation Center for Global Partnership.

-Welcome also the establishment of the Abe Fellowship program which strengthens joint studies including Japanese and American studies.

-Support Japan-U.S. intellectual dialogue and joint studies on the Japan-U. S. Global Partnership issues and related subjects.

-Encourage exchange programs at the regional and grass roots level.

-Cooperate in fostering greater Japanese-language training in America through educational exchanges and grass roots efforts.

-Promote student, teacher and other academic exchanges at all levels, through various mechanisms such as Japan Foundation programs, the Japan - U. S. Educational (Fulbright Commission), and the Japan-U.S. Friendship Commission.

-Further expand programs for parliamentary exchanges of elected officials and staffs at national and local levels.

-Encourage translation of Japanese books into English to expand access to Japanese knowledge.

-Continue the revitalization of CULCON (Japan-U.S. Cultural and Educational Conference).

GLOBAL PARTNERSHIP PLAN OF ACTION (Part II)

(Economic and Trade Relations)

I. Successful Conclusion of the Uruguay Round

II. Reinvigorating SII

III. Enhancement of Business Cooperation, Trade and Investment

IV. Computer Procurement

V. Paper Products

VI. Flat Glass

VII. Semiconductor

VIII. Standards and Certification

IX Government procurement

X. Financial Market

XI. Legal Service

XII. Policy Dialogue

XIII. Auto and Auto Parts (Separate Document)

As stipulated in the Tokyo Declaration issued on the occasion of discussions between Prime Minister Miyazawa and President Bush in Japan in January 1992, the Government of Japan and the Government of the United States of America, based upon the recognition that it is essential to identify and solve economic and trade issues for a smooth and sound management of Japan-U. S. economic relations, which are vital not only for the two countries but for the world economy as a whole, are resolved to take a wide range of necessary actions concerning major economic and trade issues between the two countries, as listed below.

I. Successful Conclusion of the Uruguay Round

The two Governments undertake individual and joint decisions necessary for the conclusion of a successful, broad-based Uruguay Round. Both the United States and Japan believe that Director General Dunkel's proposed text is an important step that helps establish momentum to bring the Uruguay Round to a successful conclusion. Of course, the Dunkel proposal is not a final text. Both Governments are still continuing to analyze and assess the document. The further important step is to negotiate improved market access for goods and services.

II. Reinvigorating SII

The two Governments intend to reinvigorate the SII through strengthening policy initiatives including new commitments to address the aspects of the business environment of both countries that might impede structural reform including market access, foreign investments and competitiveness, while fulfilling the commitment in the Joint Report of 1990.

III. Enhancement of Business Cooperation, Trade and Investment

1. The two Governments express their support for the efforts made by Japanese companies through the "Business Initiatives for Global Partnership" and welcome the announcement that 23 Japanese companies in electronics, auto, and machine industries are planning to increase their level of imports from the world by 10 billion dollars in JFY 1993 as compared to JFY 1990.

2. "Business Initiatives for Global Partnership" will promote:

- imports to Japan,

- local procurement by Japanese affiliated companies operating abroad, and

- cooperation between Japanese and foreign firms.

3. The two Governments also welcome that

- 88 companies and 22 industrial associations, which account for approximately 50% of Japanese trade, have expressed their support, and most of those companies have made voluntary plans to promote imports, local procurement and cooperation, and

- international corporate cooperation in such areas as production, sales, and joint development of products has been progressing.

4. The Government of Japan will provide, for the convenience of foreign companies, a list of contact points of the companies making voluntary action plans, and will follow up on developments under the voluntary plans.

5. The Government of Japan intends, subject to the completion of the domestic legal procedures as necessary, to take the following supportive measures in the next fiscal year in order to complement the above initiatives by the private sector.

a. Measures to promote imports

- For the purpose of accelerated improvement of import infrastructure, "foreign access zones" will be established to concentrate facilities and operations related to imports within and near international airports and seaports around the country, and to further facilitate the flow of imported goods.

- The Government of Japan intends to intensify the work of the Japan Import Board.

- In order to support the efforts by private companies to further expand imports under such initiatives as "Business Initiatives for Global Partnership" and to facilitate raising necessary funds for imports, a debt-guarantee system and import-promoting credit line system will be established. (The implementation of the import-promoting credit line is planned for as early as before the end of this fiscal year.)

b. Measures to promote direct investment into Japan

-The Government of Japan intends to take tax measures which would alleviate the burden of initial cost of foreign-affiliated companies (extension of the carry-over period for losses from five to seven years and acceleration of depreciation by 20% for five years).

- A government-financed corporation is to assist in securing manpower and giving training.

- Low-interest loans for promoting investment into Japan will be expanded.

- JETRO's service of providing investment-related information will be reinforced.

6. The Government of the United States of America encourages American companies to make the best use of these opportunities.

7. The two Governments welcome the progress of cooperation between U.S. Eximbank and EID/MITI for the expansion of U.S. exports and the economic development of developing countries, and welcome MITI's expressing its intention to allocate, for further expansion of this program, 5 billion dollars of trade insurance resources in several years, which together with U.S. Eximbank resources, could generate more than 10 billion dollars worth of projects.

8. The two Governments welcome and support the initiatives to strengthen and further promote exchanges and cooperation between business people and the business communities of the two countries through the activities of such institutions as the Japan-U.S. Businessmen's Conference, the Japan-Western U.S. Association, the Japan-Midwest U.S. Association, the Japan-Southeast U.S. Association, the Japan-Southern U.S. Association, and the Japan-Hawaii Economic Council.

9. The two Governments give support to the Business Summer Camp/Intern Project for the purpose of fostering business training on Japan for Americans and encouraging more extensive dialogue between the business communities of the two countries.

IV. Computer Procurement

The Government of the United States welcomes the decision of the Government of Japan to initiate the "Measures Related to Japanese Public Sector Procurements of Computer Products and Services" ("Measures"). The Government of Japan initiates the Measures with the aim of expanding Japanese public sector procurements of competitive foreign computer products and services, based on the principles of non-discrimination, transparency, and fair and open competition.

The two Governments expect that the implementation of these Measures, along with continued sales efforts by foreign firms, will contribute to increased Japanese public sector procurements of competitive foreign computer products and services.

V. Paper Products

By the end of March 1992, through cooperative and intensive consultations, the Government of Japan and the Government of the United States of America will agree on measures to substantially increase market access for foreign firms exporting paper products to Japan.

Japan Fair Trade Commission (JFTC) has decided to initiate a survey on conditions in the paper sector from the competition policy perspective, before the end of March, 1992.

VI. Flat Glass

The Government of Japan will take steps to substantially increase market access for competitive foreign firms making efforts to export flat glass to Japan, including the following:

- The Ministry of International Trade and Industry (MITI) will facilitate the efforts of foreign firms to increase sales in the Japanese market.

- MITI will encourage Japanese companies to make efforts to increase imports of flat glass under its Import Expansion Program.

- MITI and JFTC will encourage all Japanese glass manufacturers to put anti-monopoly compliance programs into effect by February 1992. One purpose of these programs is to ensure that the distribution system is open to competitive foreign glass manufacturers.

The Government of Japan and the Government of the United States of America will meet as either side may deem appropriate to exchange information relevant to the aforementioned steps.

JFTC has decided to initiate a survey on conditions in the glass market from the competition policy perspective, before the end of March 1992.

Ministry of Construction (MOC) will facilitate the efforts of foreign firms to meet Japanese building standards for flat glass and other glass building materials by holding briefing sessions for foreign firms and making available English language versions of all standards, consisting of the Building Standard Law as well as relevant Cabinet Orders, Enforcement Regulations and Notifications. The Director for International Codes and Standards of the MOC will serve, in this regard, as a contact point for foreign firms.

VII. Semiconductor

The two Governments, in recognition of the importance of the 1991 U.S. -Japan Semiconductor Arrangement, reaffirm their commitment to make further efforts for increased market access and for development of long-term cooperative relationships between Japanese and U.S. companies through measures specified in the Arrangement.

VIII. Standards and Certification

49 non-auto standards and certification complaints have been resolved or will be resolved through the Office of the Trade and Investment Ombudsman's (OTO) intensified efforts over the past month. These steps will improve market access in sectors such as industrial machinery, chemicals, transportation equipment, processed food, cosmetics, and pharmaceuticals. The Government of Japan will continue to actively address market access issues raised by foreign companies and others through the OTO.

IX. Government Procurement

Last November, the Government of Japan decided to take steps to increase government procurement opportunities. These steps should increase the procurement opportunities roughly from 400 to 800 billion yen (approximately three to six billion dollars). The Government of Japan intends to implement from April 1, 1992, such measures as increasing transparency in tendering procedures (procurement notices written in English, extension of the period for receipt of tenders), lowering the threshold value (from 130,000 to 100,000 SDRs), and widening the coverage (addition of 28 entities).

X.Financial Market

The two Governments intend to intensify their efforts of the U.S.-Japan Working Group on Financial Markets in order to achieve further progress in liberalizing financial markets in both countries and increasing transparency, access and competition.

XI.Legal Services

Taking into account the important role lawyers play in international transactions, the Government of Japan will redouble its efforts to resolve issues related to foreign lawyers (gaikokuho-jimu-bengoshi).

XII . Policy Dialogue

The two Governments intend to intensify bilateral policy dialogue at all levels with a view to enhancing early warning function on sectoral economic and trade issues, particularly in such fora as the U.S. Japan Sub-Cabinet Economic Consultations, the U. S. - Japan Trade Committee, the MOSS talks, and other working-level consultations on the sectoral issues.

--XIII. Auto and Auto Parts (See Separate Document) [Follows] Auto and Auto Parts

Action by the Japanese Side

1. Automobile Parts

- Japanese automobile manufacturers as the attached:

-- made announcements on US automobile parts purchases goals. These announcements were made voluntarily by Japanese automobile manufacturers, based on the premise that U.S. parts suppliers will make their best efforts corresponding to those of Japanese automobile manufacturers and that automobile production of Japanese affiliates in the United States would increase by 50% from FY 1990 to FY 1994. The aggregated figures of the announcements are as follows:

a) Automobile parts procurement by US manufacturing facilities of Japanese affiliates from US suppliers is expected to more than double from about 7 billion dollars in FY 1990 to about 15 billion dollars (in real terms) in FY 1994.

b) Seen in terms of percentage of local procurement in the total purchase of parts, the percentage is expected to increase from about 50% in FY 1990 to about 70% in FY 1994. By contrast, the percentage of imports from Japan is expected to decrease from about 50% to about 30%.

c) In making these procurements, special consideration will be given to the US parts industry, which is currently under a difficult situation.

d) As for Japanese import of parts from the United States, it is expected to double from 2 billion dollars in FY 1990 to 4 billion dollars (in real terms) in FY 1994.

e) In sum, the total of local procurement in the United States and export to Japan (import by Japan), i.e. total purchase of US parts, will increase by about 10 billion dollars - from about 9 billion dollars in FY 1990 to about 19 billion dollars in FY 1994.

(Above figures are calculated using the data collected by Japanese Automobile Manufacturers Association pursuant to the MOSS agreement.)

-- will further strengthen such efforts as:

a) promoting design-in (332 ongoing cases and 271 successfully completed cases as of January 1991);

b) expanding R&D centers in the US (7 centers of 6 firms with 1,400 employees, expected to increase to 2,200 employees in the near future); and

c) assisting US parts suppliers to develop long-term business relationships.

- The Japanese government announced:

-- assistance for design-in training in Japan for engineers of US parts manufacturers, sales missions to Japan and other measures to assist the US parts manufacturing industry (FY 1992 budget: 1.5 million dollars); and

-- further improvements in tax and financial incentives to promote imports to and investments in Japan (e g. tax incentives for business establishments of foreign firms (extension of loss carryover periods. accelerated depreciation of buildings, etc.), low interest rate loans, debt guarantee facilities, etc.) in order to promote the Initiatives for Business Global Partnership.

- Japan Fair Trade Commission has decided to initiate a survey on conditions in the automobile parts sector from the competition policy perspective before the end of March, 1992.

2. Automobiles

- Japanese automobile dealers' associations publicly reconfirmed their willingness to undertake dual dealerships to sell U.S. automobiles:

- Japanese automobile manufacturers as the attached:

--- have eliminated prior consultation requirement clauses in dealership contracts, and made it clear that dealers may of their own free will sell automobiles of multiple manufacturers in parallel,

--have expressed, including some of those who have not handledU.S. automobiles so far, their willingness to help expand the sales of U.S. automobiles. They made it clear that, in addition to U.S.-brand automobiles, the import of U.S.-manufactured Japanese-brand automobiles is estimated to rise substantially; and

-- expressed their willingness to cooperate in expanding the sales opportunity for U.S. automobiles in Japan, and have announced measures such as providing space to display U.S. automobiles at seven showrooms for the time being in the Metropolitan Tokyo area.

- The Japanese government:

-- has announced that it will actively increase opportunities for the sale of foreign automobiles, through such measures as budgetary allocations (6.3 million dollars in FY 1992) for e.g. holding foreign automobile shows in Japan (sites under consideration include Tokyo, Osaka and Nagoya) by or with assistance from JETRO; and

-- has announced that it will expand and strengthen tax and financial incentives to promote imports and foreign investments in true Japanese market with a view to promoting the Initiatives for Business Global Partnership.

With regard to standards and certification issues, under the Office of Trade and investment Ombudsman (OTO) procedure, six of the fourteen outstanding issues had been resolved at the technical level as of January 1, 1992. Of the remaining eight issues, six are in resolution and two are imminently to be resolved.

Japan Fair Trade Commission has decided to initiate a survey on conditions in the automobile sector from the competition policy perspective before the end of March 1992.

Action by the U.S. Side

- The U.S. Government is committed to an economically viable U.S. automotive industry and to increasing exports of U.S. vehicles and auto parts to Japan.

The U.S. Government will work to enhance its efforts in the MOSS process.

- Recognizing the benefits of cooperative efforts to promote trade of automobiles and auto parts in an effort to address trade imbalances, the U.S. Government will draw upon and expand existing programs, including the U.S. Department of Commerce's Export Promotion Program, and the USDOC-MITI Joint Trade Expansion Program. As required, these programs will be tailored to meet the needs of U.S. automotive industry.

- In addition, the U.S. Government will take the following immediate steps:

-- As Chairman of the Cabinet-level Trade Promotion Coordinating Committee, the Secretary of Commerce will give special focus to measures promoting automotive exports and enhancement of overseas presence by U.S. companies.

-- Encourage U.S. industry to take full advantage of Japanese Government import promotion programs, including the tax and financial incentives (low interest loan, and debt guarantee facilities announced in the Initiatives for Business Global Partnership).

The U.S. Government will encourage U.S. industry to utilize the seven showrooms recently made available by Japanese automobile manufacturers.

Joint Action

- The U.S. and Japanese Governments

-- recognize efforts made to date on the automotive trade issue and remain committed to open markets.

Both sides are committed to working cooperatively in the MOSS framework on this issue.

- Renewed efforts will be made in accelerating implementation of programs to increase sales opportunities of U.S. vehicles and auto parts in the Japanese markets. Special emphasis will be placed on implementation of the MOCP Work Plan, agreed to by the Governments of Japan and the United States, September, 1991.

This includes, but is not limited to:

- - implementing the study on the sourcing of automotive parts by U.S. and Japanese vehicle manufacturers,

--expanding R&D centers in the U.S. by Japanese manufacturers, increasing participation by U S. companies in design-in by Japanese manufacturers,

- - encouraging participation in trade shows, including the Tokyo Motor Show

- - utilizing the OTO,

Encourage the improvement of technological infrastructure and distribution facilities of US parts suppliers to take full advantage of opportunities in the Japanese market

- The two governments:

-- have initiated a Japan-US joint study regarding the trade opportunities for automobiles with a view to completing it by July, and mutually seek ways to enhance trade opportunities for automobiles based on this study.