Background Briefing by Senior Administration Officials

Roosevelt Room

2:18 P.M. EST

SENIOR ADMINISTRATION OFFICIAL: Let me lay out some of the major themes that we expect will be treated at the summit, indeed, in the course of our relationship over the coming months.

First, I would point out that this visit continues the tradition of Japanese prime ministers visiting Washington quite early in their tenure. In this case, this would be the President's third meeting with Prime Minister Murayama. They met in Naples at the G-7 last summer, they also met in Jakarta in November at the APEC leaders meeting.

The White House will have the details, but essentially, they'll have a working meeting late tomorrow morning, followed by a working lunch. The Secretary of State will be meeting his counterpart this afternoon; indeed, in about 2 hours, plus at the State Department.

This year, 1995, marks the 50th anniversary of the end of the Pacific War. And of course, this year we're of course going to be honoring our veterans. But we also want to make this anniversary year a forward looking one, one that pays tribute to the major contributions to both world and regional peace and security that have been made by the U.S.-Japan partnership. And we see this as a process over the course of the year, and indeed, as you know, I think President Clinton will be going to Japan, to Osaka, for the APEC leaders' meeting at that point. So we see this as a year of not only how far we've come since the end of World War II, but where we are in this rich partnership and the potential of looking forward.

I'd say there are several major issues that the leaders will be discussing, and indeed, as I say, will be high on our agenda throughout the coming year. There's, first, the strength of the U.S.-Japan security alliance, which also reflects our commitment to the region, to its peace, stability and prosperity. And so there will be considerable attention to reaffirming that alliance in the course of this year.

Secondly, North Korea, of course, is a very important item. Japan has been very supportive of our efforts to deal with this issue with North Korea and we've consulted throughout very closely with it, as well as of course, South Korea and some other countries. Right now, we, Japan and South Korea are engaged in a very close cooperative trilateral effort to establish the Korean Energy Development Organization, or KEDO, which is an integral part of the framework agreement reached with North Korea. And indeed, expert talks are once again taking place on a trilateral basis this week, even as we speak.

The third major area is the economic and trade area, and one of my colleagues here will go into this in greater depth. We have made some progress and reached some agreements and you just heard about, perhaps good news on still another area. This includes various stimulus packages of a macroeconomic nature by the Japanese, which we would hope would stimulate imports, including tax cuts and postponing tax hikes, which would offset their stimulus effect.

There have been a series of sectors agreements that have flown over the last year or so, everything from government procurement and telecommunications and medical technology, to insurance -- opening up their market, to apples -- just went in there a few days ago, and rice, cellular telephones, construction and electrical property rights, glass, and so on.

On the other hand, deficits persist, both our bilateral deficit, which again will be around the $60-billion mark, and global surplus current account of roughly $130 billion. And I would note that in the framework agreement, we reached with Japan a stated goal that we both set forth was "highly significant decrease" in the current econ surplus, and "significant increase in the global imports of goods and services". So there's a lot of work still to be done.

We have made progress, but it's unfinished business. We want to get at these deficits, in particular I would highlight the automotive sector -- the autos and auto parts we've agreed to resume talks toward the end of this month. That accounts for a very large part of our deficit with Japan, so that's important. Deregulation is important; and it's also important to implement what's already been agreed upon -- the various agreements that I've touched upon.

A fourth major issue will be APEC. I think all of you are familiar with this very promising regional organization. Japan will be in the chair this year. They are hosting another leaders' meeting, as well as the ministerial meeting in Osaka, in November. And there was strong leadership by President Clinton when he raised this organization to the leaders' level in Seattle last year and by President Soeharto of Indonesia this year, with the, we think, very visionary, Bogor declaration for open and free trade and investment by the year 2020, and faster for the advanced countries.

So we're going to be looking to Japan to provide some of the leadership. We'll work very closely with them, we'll be in a supporting role and their role as chairman, but we think it's important that, with Japan's dynamic leadership, that a comprehensive blueprint be devised to carry out the vision that the leaders committed themselves to in Bogor.

Finally, in 1995, we look forward to continuing to add to a rather remarkable record of cooperation under the U.S.-Japan common agenda. We now have some 19 joint initiatives, which cover everything from the environment and technology, to population issues, AIDS, children's health care, narcotics, and a new initiative concerning women and development.

Now, there are other items that either the Secretary and the Foreign Minister will take up, or perhaps the leaders, but I think those are the main items in our agenda.

Now I would like to turn to my colleague, to clue you in a little bit more on the economic side.

SENIOR ADMINISTRATION OFFICIAL: Great, thank you. My colleague touched on some of the things in the economic areas, so let me try to simply give a little more detail where I think it might be useful. But then maybe it's better to turn to questions.

From the beginning of Clinton's term, obviously he has pushed to try to rebuild the American economy. And a big part of that of course, has been in the trade area, from NAFTA and the Uruguay Rounds, Summit of the Americas and APEC are some of the large building blocks, but obviously an important dimension of that has always been that Japan dimension of the trade relationship.

And you recall, just to give you a little quick history, that in July of '93, we reached a framework agreement with Japan that began a number of negotiations in a number of different areas. Without going through the long history of that, to bring you to more recent history, in October of last year, we reached four agreements with Japan, finally, under the framework in the areas my colleague mentioned: telecommunications, medical equipment, procurement and insurance. And then in December of last year was followed up by an agreement on glass. So there's been a number of substantial agreements reached under the framework. And of course, there have been a number of agreements reached outside the framework during that time, including important areas like construction, apples -- you may have seen some of the stories today -- and cellular telephones.

Today, we're announcing the reaching of an agreement on financial services. And I'm by no means an expert on this agreement -- and Treasury can give you a more complete briefing -- but let me give you a little sense of the flavor of the some of the provisions of the agreement which I though were significant when I looked over the terms of the agreement.

First of all, the agreement covers asset management. It opens about complete and unrestricted access to about $200 billion worth of public pension fund market for foreign managers, and a substantial expansion of about $130 billion in new assets in the private pension fund market. So we're talking about large numbers here.

There is also, in the corporate securities area, a liberalization of restrictions on the introduction of new financial instruments. In cross-border financial services there is the elimination of restrictions Euro-Yen securities, and a number of other areas under that. There are also substantial improvements made in terms of transparency of government regulations and also protections against administrative abuse.

And finally, there is a follow-up mechanism. Now that's just giving you a flavor of this thing. There's a lot more detail that Treasury can go through, but it gives you a sense of what the agreement is about, and obviously, financial services is an area where we are enormously competitive and it's very important for us.

Now, looking to the future and the kind of things that may come up during the Summit, there are, first of all, several trade issues that are outstanding, probably the first one being autos and auto parts. You recall that we've been negotiating with Japan for a number of months in that area, because autos is obviously a big part of the deficit and important for our economy.

In September of this year -- October -- because we had failed to reach an agreement yet with Japan, we initiated a Section 301 case against the replacement auto part regulations in Japan. So those are the auto parts that are used as replacement for cars and are subject to extensive government regulations and restrictive government regulations by Japan.

We've recently restarted the auto talks -- talks generally with Japan, and those talks now cover three areas. First of all, it covers the area of the replacement parts, secondly, parts bought by transplants here in the United States, and third, the dealership network in Japan, and U.S. access to that dealership network. That is something that is on the agenda, the talks have just restarted and we expect negotiations to be continuing along.

The second area that is significant is deregulation. Japan expects to announce a major proposal with regard to deregulation at the end of March, and the Murayama government has put a high priority on that. Obviously in terms of opening the Japanese market, deregulation is extremely important to us; it can lead to a lot of market access in a lot of areas.

Our main point on that is that we want to encourage that deregulation area, help them and assist them with it, and we're working with our companies and our industries here in the United States to help them. But it's not the end of the story, there are other areas that we're also concerned about as well. So we're concerned about deregulation, but it's not the whole story.

A third area in terms of these sectoral agreements is compliance, that we're always concerned with, because we've reached a number of agreements, and we want to be sure that we continue to have good compliance with these agreements.

To touch on an area that my colleague touched on briefly, the macro area -- we also think that Japan has made some progress in this area, the type that my colleague talked about, but that more needs to be done. One of the significant things is that over the last two years, the growth in U.S. domestic demand has exceeded Japan domestic growth by four times as much. And that accounts -- I think if you talk to most economists, that accounts for a great deal of the increase in the deficit, because, simply, our consumers are buying a lot more, and they're buying the imports, and that's caused an increase in demand.

The last point I'd simply make is about APEC. My colleague touched on the need that we need to have to have Japan show leadership for a comprehensive agreement that covers all areas of trade. One of those significant things when they draw up this blueprint is that it cover both goods, services, capital equipment and the full range of barriers to trade that we find in -- that we've covered in past agreements and that we're going to want to be covering in the APEC agreements so that it's a comprehensive agreement. Those are the kinds of things we're looking for in those areas.

Q: On this commemoration, there is talk of a September 2nd meeting. How concrete is that, and will the Japanese participate?

SENIOR ADMINISTRATION OFFICIAL: It's not an issue that's going to be discussed at this summit. We have an official at the Pentagon, General Kicklighter, who's making preparations, has been all along, for the commemorations of the different battles, and we have a plan going through the end of the year. We have not yet decided on the culminating ceremony itself, but it's not going to be discussed at this summit.

Q: But that is the date?

SENIOR ADMINISTRATION OFFICIAL: The end of the war. The 50th anniversary will occur on V-J Day -- whenever it's --

Q: Right, but I mean that would be the biggest celebration on that day?

SENIOR ADMINISTRATION OFFICIAL: I don't know about the biggest.

SENIOR ADMINISTRATION OFFICIAL: Certainly, General Kicklighter at the Pentagon is helpful on these things.

Q: Is the issue of Japan and the United States working on theater missile defense going to be discussed at this summit? There has been some hesitation by Japanese in the past on that.

SENIOR ADMINISTRATION OFFICIAL: I'd be extremely surprised. I think generally, in past meetings, that's been between defense officials.

SENIOR ADMINISTRATION OFFICIAL: We have a process, as you know, that we've had in past years, and we'll see used again this year intensively, meetings of state and defense men with their counterparts, and these kinds of issues are usually -- (inaudible)

Q: The meeting between President Clinton and Murayama's predecessor took place this time last year and was quite acrimonious, and with the temporary collapse of the framework agreement, as I recall, what has changed in the interim to -- there seems to be much less tension over the trade issue --

SENIOR ADMINISTRATION OFFICIAL: Let me take a crack, and then I think my colleague will want to -- first, I'm not sure we would use your adjective, but clearly, we had the unusual event last year where both sides were candid to admit that there were gaps they couldn't bridge. The usual objective in diplomacy -- including in U.S.-Japan summits is to make them look good and to cover up differences. I think there was a feeling on both sides last year that on the trade negotiations, there wasn't really genuine progress at that point. And rather than paper over this, it was better to acknowledge it. Even as we stressed at the time, but of course it got lost in the coverage, that the other aspects of our relationship were in very positive shape, and they were -- the security, the common agenda, the cooperation on Korea and Cambodia and many other issues, and we tried to make that point simultaneously -- but some would understand will be the attention was on the disagreement, because -- in the trade area, because that was sort of unusual to admit that. We thought it was healthier to admit it, but then to bury our differences, and it was a joint decision to do that.

Now, since then, the following things have happened. On the one hand, we have made some progress, and my colleague and I have tried to suggest the various sectoral and structural and macroeconomic steps that have been taken that we think are significant. So that's one new factor. But I want to equally stress, as I think we have in out opening remarks, that this is unfinished business, there is a great deal more to be done. But since we have picked up some momentum, and since we have at least a process in place for addressing the others, we do feel we're in a better position relative to where we were a year ago. So, therefore, the tone, I think, will be different in this area. But I do want to stress it does not mean that we are slacking off in our commitment to making progress in opening up Japan's market, reaching further agreements, getting that deficit down on a global basis as well as a bilateral basis.

I think there's also a recognition that there are many healthy parts of the partnership which we said a year ago as well, and on this 50th anniversary year, we think it's important that these aspects receive attention, along with our continuing trade negotiations.

I think, finally, you have a broader context of addressing these trade problems. I want to stress that the bilateral dimension will remain extremely important and we're going to pursue it. But we also, at least over a longer run, have also the tools of APEC and GATT, WTO, to open up world markets generally in Japan and in particular -- (inaudible.)

SENIOR ADMINISTRATION OFFICIAL: Yes, I think that puts it in the context well. The thing that I'd add is, the thing -- however you describe it, the thing that led to the dynamic last year was simply that we did not want to accept agreements that were bad agreements. We didn't think it was good for the relationship, we didn't think it was good for the United States. And that remains true -- I mean, in the sense that we spent a great deal of time negotiating protracted negotiations on a lot of these areas, and finally reached agreements in October.

We reached a glass agreement in December, and we reached -- we think it's a good financial services agreement today. We've not yet reached an agreement on autos, and of course we want to hold that up to the standard that it has to be an acceptable agreement before we'd be willing to sign the agreement. So you don't see an agreement in that area, but I think the touchstone that we still want to adhere to is that we only want to agree to agreements that we think meet the standards that we've set.

Q: But is there any disincentive to the Japanese government to not reach these agreements?

SENIOR ADMINISTRATION OFFICIAL: You'd have to look at each one. And, obviously, these negotiations go on and they can sometimes -- the intensity of them can ramp up and so forth, and so you'd have to take them one by one. But I think in many cases there are -- and I think Japan -- you know, there are different voices within Japan, obviously, who think there ought to be openness, and then there are voices that discourage that.

Q: So on the auto talks, is there any expectation that you will see some real progress or an agreement very much before the 12-month deadline is up?

SENIOR ADMINISTRATION OFFICIAL: In which area?

Q: Auto parts or dealership --

SENIOR ADMINISTRATION OFFICIAL: We're going to have to see. We've just restarted these talks, so I think it's a little bit early to give a prognosis as to exactly when it ends. There are two dates out there -- there is the end of March when they hope to come out with their deregulation plan -- remains to be seen as to what areas that touches -- and April 1st is also the date on which the Japanese notify their intentions in terms of their future purchases of auto parts. Whether those become meaningful deadlines or not remains to be seen.

Q: You said there were different voices within Japan on these issues. What's your assessment of the Prime Minister, the leadership that he is --

SENIOR ADMINISTRATION OFFICIAL: I think clearly we've been able, under his leadership but during his reign, to complete several very significant agreements. He came into office, what, at the very end of June or the very beginning of July in time for the NATO summit, and since then we've reached the agreements on government procurement, on insurance, on glass and on financial services. So, prima facie, I would say there is a case that this is a government led by a prime minister that is able to get us to agreements.

Obviously, the auto parts is hard. Autos are hard. We've found we were unable to reach an agreement on auto parts in time to meet our deadline, and the President made the clear decision that we were going to go ahead and announce sanctions -- the beginning of the sanctions process under 301, and we remain committed to using our unilateral trade tools if we have to. We'd prefer to achieve agreements through negotiation. We're going to work very hard on these negotiations that just started; but given the President's determination to reduce the size of the trade deficit, if we don't reach agreements, we will take steps that we need to take.

SENIOR ADMINISTRATION OFFICIAL: I would point out a couple of other things. First, in terms of incentives for them to move ahead, the United States has done its -- or a large part of what it's been asked by Japan over many years, not to mention the world, to do. We've gotten our deficit down, our economy is growing I believe at a brisker pace than any of the other industrial countries; much faster than Japan right now, which doesn't help our trade balance, but is obviously good news for us generally.

We have streamlined the government, so this is what we've been asked to do by the world economy in Japan in particular for many years, and we think we've fulfilled that part of the bargain and that's why we think it's incumbent upon Japan -- in its own selfinterest -- by the way, to open up its markets.

Secondly, really what we want Japan to do, we honestly believe is good for Japan. I know that sounds perhaps a little gratuitous, but the Japanese consumers' quality of life, the Japanese themselves would be the first to admit, has suffered with their emphasis on exports growth, and we believe that opening up their economy to greater choices and cheaper goods and a variety of selections from the outside is healthy for their quality of life and, indeed, even helpful for their economic performance.

What we're seeing now is a process of reform in Japan. It's very sporadic, maybe a couple of steps forward, a couple steps backward. But to the extent there evolves competing political parties as opposed to essentially domination by one party, which you had for decades, we believe this will mean more competition for consumer votes, and should open up their market over time.

So we think there are forces at work here that are helpful, and the final point I make -- and I just want to stress this, really, for third country audiences again is that what we're doing is on a global basis. This financial services agreement and other ones that are reached benefit the world in general, not just the United States, and we are concerned about the global deficit as well as the bilateral.

Q: On North Korea, is the objective, then, to push Japan to define what type of contribution it will make to the light water reactor specifically, and if that's correct, the figure seems to be 30 percent roughly; is that what you're looking at?

SENIOR ADMINISTRATION OFFICIAL: I'd kind of like my colleague to comment. First of all, Japan and its own security and political interest has been very supportive of the agreement, and I think the Prime Minister will make that clear, not only to the President and the American public, but to the Congress, where he'll be seeing congressional leaders. And I think those in Congress who have some questions about the agreement should be reassured that our allies were the most affected by it and are very enthusiastic about it.

Secondly, part of that is forming KEDO, including the light water reactors. We are, in the first instance, consulting closely, as I said, with South Korea and Japan to work out the structure of KEDO and the relative financial contributions. We believe there should be broader international participation and, indeed there will be beyond EC, but, first, we want the three most central players to have a rough idea, or more than a rough idea, a pretty good idea of how this will work.

We will vigorously be talking to other countries, or already begun, about their contributions to various parts of KEDO, which goes beyond light water reactors. So we're not yet at a point of specific percentages, and I'll leave it to the Japanese and to the various meetings in the next couple of days to sort of describe Japan's role, but it's already clear it's going to be a very important role, along with South Korea's central role on light water reactors, and generally in the organization and financing of KEDO.

Q: Is there any possibility they'll announce an agreement paper, a specific percentage during this trip?

SENIOR ADMINISTRATION OFFICIAL: I wouldn't envisage -- we're at the point of specific percentages, but I think we've continued to make progress ever since the agreement was signed -- the agreed framework in October. We've had a series of trilateral meetings, they're continuing this week and we're making further progress. I would expect to see more progress in defining KEDO and reaffirming Japan's important role, but I don't think there will be specific percentages, which my colleague might want to --

SENIOR ADMINISTRATION OFFICIAL: I think you've covered it.

Q: Could I ask just a question about whether or not Japan and the U.S. at this visit are -- talking a little bit of cross-purposes. Everything that we've heard from the Japanese side is about the -- commemorating the 50th anniversary, is about celebrating the common goals objectives of the two nations, talking about positive things.

We were told quite emphatically yesterday that the people on the Japan side don't really see economic issues being put that much on the table, want to try to avoid those and that there are concerns that disputes about petty and mundane trade issues, sort of described to us yesterday, were interfering with the security relationship, which was much more important, and yet I talked to the people on the economic side, and I hear from the U.S. very strongly that, no, economics will be the focus, it will be an important focus of these discussions. What's happening here? Why do we get these two different messages from the two different sides?

SENIOR ADMINISTRATION OFFICIAL: Again, there will be other comments here. First, I'm not sure what Japanese comments you're referring to. We have tried to outline here what we considered a balanced approach, acknowledging some progress in the economic area, but also underlining the unfinished business, highlighting as we have all along, but it's been lost in the noise about the economic negotiations, the fact that the other aspects of our relationship are in sound shape, whether it's the security alliance, cooperation on Korea or other regional conflicts, and peacekeeping, the common agenda, commitment to APEC, and we will be talking about those. We will be highlighting and commemorating World War II in a positive way, as we said.

So we certainly will have that dimension to our tone and our presentations and our agenda, but we don't think it's healthy for the partnership, which is in good shape generally elsewhere to ignore unfinished business. We do believe there is unfinished business on the economic side. That doesn't mean it has to be acrimonious, it doesn't mean it's going to be the dominant or sole agenda item; there will be many agenda items. But this will certainly be an important one.

SENIOR ADMINISTRATION OFFICIAL: You know, it seems to me, given the sheer economics of the two countries, economics will always be important. I think the U.S. and Japan are the largest bilateral economic relationship in the world. And I don't know what the figure is this year, but last year the figure was that the U.S. and Japan together account for 40 percent of the world's GNP. Think about that.

In that context, it seems to me very hard to believe that economics won't be an important part of the relationship at every summit that comes up.

We've talked in the past and used the metaphor -- which isn't a bad metaphor -- about three legs of a stool, and that there are three separate legs that we all have to address; they're all important in holding up the stool, but they're all three important. And it seems to me, to talk about as a tradeoff isn't particular useful.

SENIOR ADMINISTRATION OFFICIAL: Why don't you explain the three legs --

SENIOR ADMINISTRATION OFFICIAL: Well, three legs, if I can remember, because it was used more last year was: economics -- (laughter) -- I will tell you -- economics, security and sort of global cooperation issues. And all of them are really important in that relationship, and I think we've been saying that from the beginning. And I think economics is going to continue to be important, because it's such an important bilateral relationship.

Q: Just recently, some Japanese business leaders were quoted as supporting this old idea that never dies, an intra-Asian trade grouping, the Malaysian proposal. Is that going to come up at this summit? Are you going to ask the Prime Minister to do what he can to avoid supporting this, or to support APEC and not the Malaysian proposal?

SENIOR ADMINISTRATION OFFICIAL: I don't think it will be a summit issue. I don't know whether it will come up in the Secretaries' meeting, but I wouldn't expect it between heads of state. In any case, the Japanese have been quite supportive of the U.S. position up to this point. We have taken what we think is a very straightforward proposition that this shouldn't be a dividing line across the Pacific where you have an Asian bloc that excludes the English-speaking bloc, and that's why we've opposed the EAEC. We think APEC should be the inclusive mechanism for dealing with everyone, and we've had very strong support from Japan on that up to this point, and I've seen no indication of a change.

Q: Do you expect any discussion on the Kuril Islands?

SENIOR ADMINISTRATION OFFICIAL: I would think that -- the answer is, I don't know is the quick answer. I do think in the course of the conversations, including the foreign ministers this afternoon and more likely there, perhaps, than the leaders' meeting, but I wouldn't presume to dictate the agenda for the President, that I would think Russia would come up. It's obviously an extremely important country to both of ours, and to world prosperity and stability. You have the current events there that are of interest; there may be some discussion of that.

Japan does have this complicated historical relationship with Russia, we welcome the improvement of relations between the two; we support the Japanese position on those islands. So I would not think this would be a centerpiece even of this afternoon's conversations, but I think it would be natural in the course of a tour d'horizon in addition to the issues we've mentioned if the foreign ministers got into Russia, including perhaps that subject.

Q: Is there an indication from the Russians of movement on the issue?

SENIOR ADMINISTRATION OFFICIAL: Not that I've seen.

Q: On the security issue, I wonder if you could sketch in what some of the issues are now that the posture the Japanese being supplementary to our position -- to the Soviet Union and the North Pacific has changed. How is the relationship evolving?

SENIOR ADMINISTRATION OFFICIAL: Well, we believe -- and I do want my colleague to add on here -- we believe that the relationship is as important as ever, improving the security relationship in the post-Cold War environment. Important not only for our two countries, but for the stability of the region. Almost every country out there welcomes our foreign military presence, and Japan's support is part of that. They also welcome our alliance with Japan, which they think allows Japan to concentrate its energies on other areas, and promotes stability in the region.

Now, increasing the emphasis and the rationale for that alliance with the disappearance of the Soviet threat will be on the regional stability and the various purposes that are served by that, and we've seen just in the Korean events how important this alliance can be as a backdrop. So having said all that, we don't think we should be complacent. I mean, you have changing Japanese politics, you have the fact we are in the post-Cold War environment, that the Soviet threat has disappeared. You have certain budget pressures and concerned domestic agendas, so that we should never take such a critical alliance for granted. We're very confident it's in healthy shape, but we're not going to take it for granted, and we would propose, as we have in past years, to examine this at various levels quite intensively, and I'm sure will be in force and reaffirm that alliance.

SENIOR ADMINISTRATION OFFICIAL: A lot of the issues that won't get threshed out in detail tomorrow, but we've been talking about them and will be talking to them about it in an intensive dialogue all year long, relate to nuts and bolts. Japan is behind us in terms of the bottom-up review that we did in trying to figure out what our missions were in the post-Cold War period and what forces and what equipment we needed to carry out those missions. They are going through that exercise now, in trying to figure out what they think they want to do for their midterm defense plan when they have to make very important decisions involving billions of dollars, including purchasing American equipment that generates jobs sometime next year; and we're consulting very closely with them.

In addition, they provide us roughly $4 billion a year in host nation support for the U.S. forces in Japan, resulting in a situation where it's cheaper for us to maintain our forces in Japan than to bring them home unless we demobilize them. The agreement by which they do that expires shortly, and we have to negotiate a new agreement. We all expect that we will negotiate a new agreement probably on better terms, at least as good as we have now, but that's something we will be discussing.

Then we come up with new roles and missions. This links to Japan's desire to be a permanent member of the Security Council, but it also relates to peacekeeping. And we are talking to Japan about them being more involved in peacekeeping the way they were in Cambodia, and they have recently been involved in Rwanda. This is a mission that they will probably have to increase as they make their bid to get the permanent membership on the Security Council, so it's also a defense issue.

Finally, there is the question of just the regional security, which is one of the priorities of this administration, one of the areas of difference with the previous ones that we've spent a lot of time looking at regional security organizations, like the ASEAN Regional Forum, for example, and we're trying to see about something for Northeast Asia, but to see if we could discuss questions such as, as the countries of the region explode economically and thereby get the economic capability to build up their militaries, are we reaching a situation where things could somehow get destabilizing almost by accident as everyone modernizes. And we're trying to work on a situation where we get together in the ASEAN Regional Forum and have confidence-building measures, greater transparency on arms sales, discussion of doctrines, talk about observers and exercise the staff exchanges, and, more important than that, getting the leaders together from the key ministries to just talk about how they see the key problems in the region, such as the Spratley, such as North Korea.

So it's a pretty rich, to use my colleague's word, agenda on the security side.

Q: Could I -- on the peacekeeping, what is the U.S. position on the suggestion by this Japanese government several times that it would like its forces to take part in peacekeeping missions, only on the basis that there would be no hostilities or conflict, that it would restrict its taking peacekeeping operations to --

SENIOR ADMINISTRATION OFFICIAL: The difference between peacekeeping and peacemaking?

Q: Yes. Is that what they're calling -- yes.

SENIOR ADMINISTRATION OFFICIAL: Well, Japan has a constitutional problem, of only being able to do things that are defined as self defense. And there is a large measure of interpretation within that as to what is self defense. But essentially right now, the political status quo in Japan is that, going abroad to oppose peace would not be self defense.

We have been trying to get Japan to engage, I would say -- not really -- we haven't focused nearly as much on the question of peacekeeping versus peacemaking, as just trying to get an ambitious Japanese role across the board on international peacekeeping issues so that peacekeeping isn't viewed purely as a regional issue, or something you do in Asia that you do in another part of the world, that you contribute to Cambodia but not to crises in other regions. Contributions can be financial, they can be with technical support, they can be with equipment -- you can define contributions -- I mean, it's a whole range of issues, not just the question of soldiers to shoot.

SENIOR ADMINISTRATION OFFICIAL: Here I ought to underline, I think, considerable progress made by Japan with respect to participation in these activities, leaving aside specific mandating which has to do with Japanese constitution that they have to sort out. But Japan has been very significant in Cambodia, they had observers there that have also been very significant in aid to Cambodia, and sort of leading that effort.

I'm not going to get in a complete list here, but they've been in almost every continent already one way or another, sometimes with modest presence; Rwanda, Zaire, Somalia, Mozambique; Cambodia I've mentioned. I think they're interested in participating in the Middle East Development Fund, and I've sure I've left some out. But it's getting to be a fairly impressive list of involvement, all within a year or two. So this is among the items on this agenda we'll be talking about; their capabilities for this defense agenda, their capabilities and the forces they need to do it. And we think is one reason why they deserve a permanent seat in the United Nations Security Council, in addition to their economic strength and their political clout.

Q: Can I ask about who set this us and what the urgency of it was? I'm a little bit puzzled as to why is it Mr. Murayama has gone to such great trouble and time to come all the way over here to meet the President at a time when he's got all kinds of things of his mind and Murayama's own party is on the verge of disintegration in Japan.

SENIOR ADMINISTRATION OFFICIAL: Again, my colleague will have an answer to that as well.

First, as we already said, its sort of a tradition given the importance of the relationship that there be early meetings, early in the tenure, and indeed, although they have met outside the United States.

Secondly, the main answer to your question, I think, the Japanese made this clear from the beginning, and they made it clear in their briefings yesterday: they believe that it's important to start this anniversary year on a positive note. We've seen whether it's stamps, or a Smithsonian exhibition, that there can be some sensitivities during the course of this year, so they felt it important to meet at the highest level and to reaffirm our partnership and to look forward in this anniversary year. So that's a major reason.

Thirdly, I'm not going to comment on Japanese politics, but traditionally a good handling of the U.S. relationship helps domestically for a prime minister. So these are some of the reasons and I would refer you to the Japanese why they wanted an early meeting, but I interpret these to be their reasons.

Q: They urged that --

SENIOR ADMINISTRATION OFFICIAL: I'm sorry --

Q: This was arranged at their --

SENIOR ADMINISTRATION OFFICIAL: Well, you don't have a meeting -- believe me, given the President's schedule, it's got to be mutual desire here. We in turn felt for these reasons it was a good idea to start the year off on a positive note. The President's highest priority includes continuing -- includes economic health here at home and certainly this partnership is important to that, as well as our security and other interests. Frankly, there's also the problem that the Japanese Prime Minister can't travel when the Diet is in session, so if you don't do it in January you probably can't do it until May. And that's just too long a period for such an important partnership.

Finally, Japan is the host of APEC, for example, and early on in its tenure we want to get clear between us how we're going to develop the Bogor vision into a detailed blueprint under Japan's leadership, and it's important to do that early in the process. So there's a lot of reasons on both sides for doing this. I think the fact that the President, despite certain election results, despite the domestic agenda, 100-day contracts and all the other things on his place, he felt it was important to have this meeting with the Japanese Prime Minister.

SENIOR ADMINISTRATION OFFICIAL: I think you can almost loop the question around. It's almost 20 years since Mike Mansfield made his famous statement about Japan as our most important -- or bilateral relationship bar none, and we believe it. We've repeated that phrase several times in face-to-face meetings with the Japanese. To tell the first Japanese Prime Minister since the World War that now this is not a convenient time to come, we're too busy for Japan, that would have been historic. My colleague has gone over the litany of major interests we have with them -- APEC, North Korea alone, is certainly more than justifying in realpolitik terms this summit if there were no framework calling for two meetings a year, if it were not a tradition for a Prime Minister to come, it would still be very much in our interest to have this Summit.

Q: I'm correct in understanding you've reduced the press conference at the end of this to a five-minute photo op, is that right?

SENIOR ADMINISTRATION OFFICIAL: We haven't made any specific decisions on layout; we'll let you know.

THE PRESS: Thank you.

END