U.S. DEPARTMENT OF STATE DISPATCH VOLUME 5, NUMBER 4, JANUARY 24, 1994 PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS ARTICLES IN THIS ISSUE: 1. Eulogy for Norwegian Foreign Minister Holst -- Secretary Christopher 2. U.S. Commitment to Global Issues -- Timothy E. Wirth 3. The United States and the United Nations In the Global Era -- Douglas Bennet, Jr. 4. U.S.-Japan Economic Framework Talks ARTICLE 1: Eulogy for Norwegian Foreign Minister Holst Secretary Christopher Eulogy at memorial services for Norwegian Minister for Foreign Affairs Johan Jorgen Holst, Oslo, Norway, January 22, 1994 Today, we who represent the international community mourn, honor, and remember Johan Jorgen Holst. Our hearts are with his family and friends, and we are grateful to be permitted to join this service in his memory. We have lost a valued colleague and a generous friend. Those who knew him as a distinguished academic, as Defense Minister, or as Foreign Minister knew a man of powerful intellect, firm convictions, and deep commitment to public service. Norway has a noble tradition of working for peace, human rights, and humanitarian causes. As an American with Norwegian blood in my veins, I find great satisfaction in reflecting on the heritage of public service that shaped Johan Holst's career. In the last months of his life, Johan Holst turned his skillful and sensitive diplomacy to the Middle East. He was at once imaginative and practical. He understood that change must come--not just through symbols, but through pragmatic actions that would make a genuine difference in the day-to-day lives of the people. He believed that, away from the glare of publicity, it was possible to promote a path to reconciliation between Israelis and Palestinians. And so Norway facilitated and nurtured the contacts that led to the historic handshake at the White House last September 13. The extent to which Johan Holst's energy and determination contributed to that process came home to me in August, when he flew all night to California to share with me his assessment of the Israeli-PLO Declaration of Principles. History will record the essential part that Johan Holst-- and Norway--played in helping to turn the Middle East from a cauldron of hostility into a cradle of hope. Yet Johan Holst was modest about his role. He said that he had only grasped the baton that was passed to him. And he knew that the agreements reached in Oslo and Washington were a beginning, not an end. Many of us here today are linked by our desire, and our efforts, to find an enduring peace in a region so long at war. Each of us must now follow the splendid example of Johan Holst. To do his memory justice, we must grasp that baton and carry it, together, to peace. (###) ARTICLE 2: U.S. Commitment to Global Issues Timothy E. Wirth, Counselor Opening statement at a State Department press briefing, Washington, DC, January 11, 1994 I don't have to remind all of you that during the campaign of 1992, President Clinton and Vice President Gore put an enormous emphasis on the new realities of the world and the fact that our approach to international security was changing very dramatically, some of that being pushed by this new Administration and some of it, obviously, by events around the world. To back up that commitment, the Administration started very rapidly with a series of reorganizations to reflect the new global realities. One of those was in the White House, one in the National Security Council. I think all of you are familiar with the reorganization at USAID, and another one was the reorganization of the State Department to develop the global affairs group. I have handed out to all of you a copy of the organization chart to remind you all of what the new organization at the State Department looks like de facto now, and will look like in reality after the Senate deals with the State Department authorization bill, which will be the first item of business up at the end of January. When the Senate comes back on January 25, the first item will be the State Department authorization bill, and in that will be all of the specifics of the reorganization. That reorganization will create formally these four new bureaus over which I have had responsibility since April. The realities of the new foreign policy approaches were also reflected by President Clinton in his United Nations General Assembly speech in September, where it was the first time a United States President had talked about such issues as sustainable development and population--a major set of changes of priorities of the United States of America and a reflection of our commitments and willingness and desire to lead on these issues. Vice President Gore reflected the same priorities at the Commission on Sustainable Development sessions in New York, and we continue to push on our new understandings and definitions of what we mean by our own national security, population, environment, counter-narcotics, terrorism, and so on. In addition, the Administration has put increased and broader support into our commitments around the world for U.S. values, reflected particularly in the human rights and democracy packages. This year we have a very ambitious agenda in the global affairs area. A top priority for everybody is our commitment on population. As all of you know, I believe, the world population is currently at 5.5 billion. If we do nothing, the world's population will double again sometime in the next 35 to 40 years and will move on to 13 to 15 billion people before it is estimated that it will level off. To imagine a world in which the population doubles in this fashion is unfathomable and clearly does not allow us any way that we are going to be able to maintain the quality of life or respect for individuals that are fundamental to what we believe in the United States. Nor would it allow us to maintain an environment with any integrity whatsoever or to conserve what many would call God's creation. As a consequence, the United States has moved very dramatically into the population area. We redefined U.S. population policy early in the Administration and again in New York, much to the delight of most countries in the world, who are very eager for U.S. leadership and very pleased that we are undertaking again a commitment that we had had during the 1970s. The centerpiece of this year's activity will be the Cairo Population Conference in early September. That will be for population what Rio was for the environment. You will remember the UNCED Conference in the summer of 1992, which was so enormously important in bringing world leadership together around environmental issues. They will come together in September 1994 around population issues. We will have a dramatically increased presence and commitment to that and hope that we will have some major commitments as well, working with other countries and presenting a united front with countries from the developed world as well as the developing world. On the environment, we have a series of very, very important tasks ahead of us. One of those relates to global climate change and assuring that other countries meet their commitments as the United States has. President Clinton laid out our set of goals on Earth Day in 1993, and we have a lot of work to press other countries to reach the commitments that they also signed in Rio. Biodiversity is an increasingly important and a very, very important issue globally. We have sent up the biodiversity treaty to the Congress. We look forward to its ratification early this year, and we look forward also to a very aggressive approach with the developing world and with private enterprise--what Al Gore has called a major, new partnership to pursue the goals of biodiversity. A third area that is probably right at the top is environment and trade. Post-NAFTA and post-GATT, we now have a number of major problems that are popping up in the area of trade and the overlap of trade and the environment, ranging all the way to the tuna-dolphin case that you are all familiar with. You remember when the United States said that we would not allow or have the sale of tuna, in the United States, that was not caught with dolphin-free nets--that is symptomatic of a whole series of problems when environment and endangered species issues overlap with economic issues. We have others in timber and others in the European challenge to our CAFE standards. We are going to see the trade issues increasingly defined by many of the environmental issues. Finally--and I will stop with this--we have a major challenge on Capitol Hill to redefine and develop a new partnership within the United States on counter- narcotics. The Congress and the country are very skeptical--we think with good reason--of the previous Administration's efforts, which had placed so much effort on interdiction. Lee Brown, head of drug control policy, and Bob Gelbard here and I are developing--and the President signed off on--a broad, new strategy which will place greater emphasis on demand at home and greater emphasis on institution-building overseas. This means that the flow of funds and the efforts made by our embassies--not only in the Andean area but in Southeast Asia, with the growing and very troubling problems of heroin--are going to get greater attention and, we hope, increasing support from the Congress. A final note on human rights. We have been very successful in getting the United Nations to agree to a Human Rights Commissioner who will be named, and we will have a set of efforts to try to strengthen the human rights capabilities at the United Nations and around the world. Let me stop at that. Our next most immediate target is the President's meetings with Prime Minister Hosokawa on February 11 and 12, in which the Japanese and the United States are having meetings that were agreed to in the common framework. They will have two trade packages and one very large, global package in which we have worked out a very exciting and broad, new cooperative agenda with the Japanese, the results of which--many results and very promising results, we hope--will be announced on February 11 and 12 by President Clinton and Prime Minister Hosokawa. (###) ARTICLE 3: The United States and the United Nations in the Global Era Douglas Bennet, Jr., Assistant Secretary for International Organization Affairs Address before the National Convention of the United Nations Association (UNA/USA), New York City, January 6, 1994 Thank you for the invitation. I am delighted to be here. I will come right to the point. Building a vibrant and productive partnership between the United States and the United Nations is one of the critical tasks of our time. And I can tell you after some months as Assistant Secretary of State for International Organizations that-- if you like roller coasters--it is also one of the more exhilarating tasks of our time. It is also a task in which the UNA/USA has long played a dynamic leadership role. For that and for all your good work, I salute you. I suspect many of you saw the cover story in the Sunday Times magazine this past week featuring a battered blue helmet and a discussion of the trials and tribulations of UN peace-keeping. That article--and the facts on which it is based--underlined again the importance of the U.S./UN relationship. It reminded us that the UN remains dependent upon the will and the resources of national governments, which in turn depend on collaboration through the UN to do things none of them can do alone. It told the story of an able and distinguished Secretary- General doing a hard, and, at times, thankless job. And it should compel us to respond to the advent of a new and promising historical age, not by settling for what seems possible today, but by setting our sights on what may be possible tomorrow. Let me start with two pragmatic policy propositions: First, the United States should maintain a robust military and diplomatic capacity to act unilaterally. This is necessary because the world remains dangerous, and because we want to influence events in directions that reflect our interests and values. Second, we need workable alternatives for those occasions when unilateral action is unnecessary, insufficient, or unwise. That is why we are preserving vigorous alliances with our fellow democracies and long-time friends, and why we must put fresh energy into our commitment to the United Nations. These basic propositions frame our approach in what pundits persist in calling the "post-Cold War era." I note from your program that the UNA has a more useful label: "the global era." The distinction is by no means semantic, for as the President recently pointed out, post-Cold War tells us "where we have been, not where we are going." The Cold War prism also tells us little about the underlying forces of history which helped end the old era and are plainly shaping the new. These are indeed global forces. Only if we build policies and institutions that take them into account can we expect to succeed. What are some of these forces? -- Economic interdependence is one. Labor, capital, production, and markets have all been globalized. -- The information revolution--faxes, VCRs, satellites, CNN--have made people around the globe more aware, more demanding, and more able to act independent of governing structures. -- Not only are money and ideas overrunning political borders, so too are refugees, immigrants, pollution, narcotics, armaments, and disease. As a result, terms like national interest and national security are losing clarity. And national governments are less able, on their own, to satisfy popular expectations. -- At the same time, more and more non-state actors are moving onto the world stage. These include multinational corporations, environmental and human rights organizations, criminal cartels, ethnic minorities, and individuals of broad public influence. These and other forces are the essence of the post-Cold War world, and they are changing the international order beyond anything the statesmen and statecraft of the old state system ever contemplated. Long-stable institutions have been profoundly altered; some--including the United Nations--are acquiring new relevance; others--like NATO-- are being redefined; still others are fading from view. It should not surprise us, then, that Americans' own vision of global affairs is in flux. Clearly, economic and social problems--legacies, in part, of Cold War costs--occupy our attention here at home. A recent Los Angeles Times poll concluded from this that the general public: is inclined toward a new but unique kind of isolationism. . They want a foreign policy that serves the domestic agenda of the United States, and they would treat each global issue according to its impact on that agenda. According to the pollster, the top foreign policy priorities of the American people are to stop drug trafficking, strengthen our economy, halt the flood of illegal aliens, and protect the global environment. To me, these priorities are not isolationist at all. On the contrary, they contain the seeds from which a new and revitalized consensus about our role in the world may grow. People are seeing that global forces do have a real impact on their lives and believe, not unreasonably, that a central purpose of a successful foreign policy should optimize these impacts. The Clinton Administration's focus on global economic growth is part of an emerging domestic/foreign policy synthesis. By enlarging the circle of market democracies and reducing barriers to trade, we create good jobs at home, while giving more and more states a vital stake in the international system. NAFTA, APEC, and GATT don't exactly roll off the tongue--and not everyone agrees about them, to be sure--but they reflect precisely the kind of domestically grounded multilateral initiatives that will serve our citizens well in a global era. Against this background of a transformed and transforming world, we need to ask ourselves anew: What should we expect from the United Nations and other international institutions? Where do they fit in? What can we do to limber them up? How can we develop robust options for collective action and burden-sharing, when those alternatives appear to offer the best solution? Clearly, the potential for international organizations to play an influential role on the world stage is greater today than in previous decades. If we are to fulfill that potential, we must forge international arrangements that complement, not compete with, the efforts of national governments. This is not a zero sum situation in which existing authority is simply reapportioned among national and international actors. All must make the strongest contributions they can. For purposes of tonight's discussion, I will divide the Clinton Administration's strategy for developing the kind of multilateral institutions we need into three general components. First, we are taking a new and more constructive approach to reforming UN institutions. As our superb Permanent Representative to the UN, Ambassador Madeleine Albright, has pointed out: . . . the bills of the [United Nations] are not paid by governments; they are paid by hard-working, tax-paying citizens--the largest portion by citizens of the United States. Those citizens have a right to know that their dollars are being used wisely, efficiently, and for purposes they understand and support. We who are responsible for the UN cannot afford the luxury of bureaucratic bloat. There are too many important jobs to perform and, in key areas such as peace-keeping and emergency relief, far too few resources. We must now do what governments, businesses, universities, hospitals, and other institutions are being asked to do: improve services while controlling costs. In the recent past, the United States has pursued UN reform through micromanagement and interference in its innermost workings. The result was little reform and even less accountability. The current Administration has charted a different approach. Instead of trying to micromanage in quest of micro-gratifications, we are trying to shift the focus to good governance--to setting broad objectives, to holding UN managers responsible, and to evaluating results. The global era is also a competitive era. As a contender for scarce public resources, the UN can neither be insulated from that competition, nor should it fear it. The UN brings to the table enormous assets of global legitimacy, a record of past accomplishment, and a system of shared financing that multiplies each dollar contributed several times over. Unfortunately, as former Ambassador Donald McHenry has said: The whole UN civil service got hijacked by the Cold War and decolonialization. Everybody, us included, started insisting on certain jobs within the UN and using them for defeated politicians. . . . Once you took on such an individual, you had to take on three other people [who could actually] do the job. The United States is now trying to set an example by embarking on a higher road. We're working to identify outstanding individuals not only from our own country, but from around the world, to recommend for high-level UN posts. We're advocating a personnel system in which UN employees are hired, fired, and promoted according to merit, rather than political pull. And we're pressing for reforms that will give agencies and programs a real chance to perform, with the understanding that we will back fully those that achieve results, and do our best to pull the plug entirely on those that do not. The second element in our strategy at the UN is to take full advantage of the opportunity to break free from the east-west, north-south divisions that have traditionally hindered the institution's work. Here, with a massive assist from history, we are making dramatic progress. For example, this past fall, the General Assembly voted to establish a UN High Commissioner for Human Rights. This is something Americans have been pushing for, with greater or lesser degrees of energy, since the days of Eleanor Roosevelt. It is a true landmark in the life of the UN. It could not have been achieved during the Cold War, but this year, every former Soviet Republic supported it, and regimes that abuse human rights were reduced to delaying tactics and weakening amendments that failed. The High Commissioner is no panacea for human rights problems, but he or she can become a highly visible and influential champion for a cause that embodies both UN principles and our core values. Arms control is another arena in which the Cold War chilled cooperation. But this past fall, at the General Assembly, Russia opposed the U.S. on only one of 53 arms control and security-related resolutions. The UN endorsed a comprehensive nuclear test ban treaty, a ban on the production of fissile material for nuclear weapons, and a moratorium on the export of anti-personnel land mines. Meanwhile, the IAEA, with support from all major powers, is playing a key role combating nuclear proliferation in North Korea and Iraq. These actions, too, accord with the fundamental purpose of the UN as a peace-preserving institution, and with the interests of our own citizens in a more stable world. There is also a new attitude at the UN on what has historically been the most contentious of issues--the Middle East. September's Israeli-PLO Declaration of Principles breeched deep and bitter divisions. For the first time, an Israeli was elected to a position at the General Assembly. Anti-Israeli rhetoric was toned down and action on some particularly divisive resolutions was deferred. Most importantly, the peace process was endorsed by a nearly unanimous vote, and there was broad support for economic and social projects in Gaza and the West Bank. Let me cite briefly some other areas where U.S. leadership and a changed UN hold the promise of benefits for us and for others: -- We are determined to make the War Crimes Tribunal for the former Yugoslavia a meaningful instrument for establishing the truth about the atrocious violations of international humanitarian law committed in the Balkans. -- We are welcoming and participating in the UN's entry into the business of democracy-building and election- monitoring in places as diverse as El Salvador, Cambodia, South Africa, and Mozambique. -- We are working to follow up on the 1992 Earth Summit in Rio by making the concept of sustainable development a reality in people's lives, in our own country and overseas. -- We have embarked on a joint effort with Japan to improve the coordination of the UN's response to complex emergencies. And the President himself has called attention to the heroic efforts of UNICEF and WHO to save children's lives. By using low-tech, low-cost, high-impact techniques, these agencies have raised child immunization rates in cities like Lagos, Calcutta, and Mexico City above those even in the United States. As a result, more than 3 million children who would otherwise die each year are now getting a chance at life. This is doubly important because we know that birth rates decline when parents are confident that the children they do bear will survive. The key fact here is that without a general spirit of cooperation--to which the U.S. is contributing--these initiatives and experiments at the UN would not be possible; and without experimentation, forward movement would not be possible. Today, the habit of cooperation has led the UN to the threshold of a new age of discovery. Like the European monarchs of 500 years ago, those of us responsible for international organizations are sending vessels to sea in search of the unknown. Like them, we can expect some of those vessels to turn back, some to sink, and some to find new worlds wholly beyond our prediction. The important thing is not that there are setbacks, but that we continue to sail outward toward the horizon, rather than allow our resources to rust inexorably and uselessly in port. The third element in our UN strategy is international peace-keeping. Why? Because if we do not wish to assume responsibility for containing overseas conflicts ourselves, we must look to the UN and regional organizations to do so, or accept a future ruled not by the law of nations, but by no law at all. Territorial disputes, armed ethnic conflicts, civil wars, and the total collapse of governmental authority in some states are now among the principal threats to international peace. Although many of these conflicts do not now impinge directly on our security, the cumulative effects of continuing conflict include economic dislocation, humanitarian disaster, terrorism, regional political instability, and the rise of leaders and societies that do not share our values. We are working with Congress to forge a strong bipartisan consensus on our approach to international peace-keeping. Such a consensus must be guided by realism about what the UN can and cannot be expected to do, especially in the short term. It must be durable and disciplined enough to withstand the vicissitudes of this morning's headlines and tonight's network news. And it must be hard-headed enough to merit the confidence of the American people, including those who serve in our armed forces. The elements of such a consensus may well include: First, agreement that UN peace-keeping capabilities must be strengthened in almost every area. Second, agreement that fundamental questions of need, mission, cost, and likely duration must be asked before-- not after--new UN obligations are assumed. Third, agreement that where it is in our interest, America should support and sometimes participate in well- planned UN peace operations. But the U.S. contribution will most often be in areas such as logistics, intelligence, and communications, rather than combat. And fourth, under no circumstances will American servicemen or -women be sent into combat in the absence of competent command and control, nor will the ultimate command authority of the President over U.S. armed forces ever be compromised. A consensus on peace-keeping must also draw the right lessons from past successes and disappointments. The difficulties of peace operations in Somalia, Bosnia, and Haiti demonstrate that traditional approaches are not adequate where government or civil society have broken down or where one or more of the parties is not prepared to end the conflict. Major operations must be planned not only with "best-case," but with "bad-case" and "worst- case" scenarios in mind. A clear understanding must exist not only of how an operation might begin, but also of how it can be brought to a conclusion within a reasonable period of time and at an acceptable cost. Finally, the complexity of modern peace-keeping missions underlines the importance of being very clear about what the mission is and how the mission is to be accomplished. Certainly, the experience in Somalia underlines the importance of defining a mission clearly and of understanding the limits of what outsiders can do in the absence of an internal commitment to peace. At the same time, we should not forget that because of American and UN efforts, hundreds of thousands of Somali children are alive, crops are being planted, and prospects for political reconciliation are real. No one can guarantee what Somalia will look like a year or two from now. But it would be patronizing to assume that Somali leaders have not learned from past tragedies, or that chaos will inevitably ensue as the international presence is drawn down. Nor should we find it troubling that the fate of Somalia will be shaped primarily by Somali hands. UN peace-keeping is not the only tool, but it remains a vital one, for responding to threats to international peace and security. Certainly, such threats will continue to arise. The world will continue to look to America for leadership. It will continue to be in our interest to provide that leadership, but we cannot and should not bear the full burden alone. We, and all those who share our stake in a relatively peaceful and stable world, will benefit if the UN becomes more capable of preventing, containing, and ending international conflict. Although it is true that the UN has moved to center stage of world affairs in recent years, the reviews to date are mixed and the prospects are unclear. The UN's commitment to genuine reform remains suspect. Because of financial shortfalls occasioned, in part, by the United States, the UN's logo seems sometimes less the dove of peace than the tin cup. The durability of major power cooperation at the UN cannot be taken for granted. There are inevitable limits on what an organization dependent for its mandate on the full diversity of world opinion is going to be able to do. But we would fail in our responsibility if we were to take too narrow and pinched a view of the opportunities that are now at hand. We Americans, living in an open democracy and a global economy, have a deep interest in a world where acceptable "rules of the game" are observed. For decades, we argued the merits of free markets, free elections, the nonproliferation of weapons of mass destruction, and human rights. During the depth of the Cold War, these issues were raised even when hopes for immediate progress were not realistic. Today, as the global era dawns, we have the chance to see real movement toward higher standards of international behavior, not overnight, but over time. International organizations, and especially the UN, can be central to this effort. A couple of weeks ago, the Secretary-General met in Japan with the family of Atsuhito Nakata, a young UN volunteer who was shot to death in Cambodia last April. There was no bitterness. On the contrary, the young man's mother spoke of her son's deep love for the UN. The father, who has quit his job to become a UN volunteer himself, told the Secretary-General that "although my son's flesh has vanished, his spirit of service has survived." Thanks in no small measure to you--the UNA/USA--this same spirit of service is alive and well in America. It is no accident that 71% of Americans said in a recent poll that the U.S. should cooperate fully with the United Nations. Because of your efforts, most Americans understand that the UN family is characterized less by the renowned slothful bureaucrat than by the health technician whose vaccines are saving small children; the election monitor aiding the cause of freedom; the convoy driver struggling to help the innocent survive; and the peacekeepers like Atsuhito Nakata and our own servicemen and -women who have given so many victims a chance for what President Clinton has called "the quiet miracle of a normal life." Forty-eight years ago, another President, Harry Truman, pledged to the first General Assembly that America would: . . . support the United Nations with all the resources we possess . . . not as a temporary expedient, but as a permanent partnership. After decades of ups and downs, this partnership between the U.S. and the UN continues to contribute mightily to a global system more acceptable than anything either we or it could achieve alone. The financial cost is relatively small. The entire UN system, including peace-keeping, gets 0.7% of the $285 billion the U.S. spends annually on international security. That translates into a price per capita for us, for everything from blue helmets for peace-keepers to polio vaccines for babies, of less than $7 a year--or the price of a ticket to see "The Pelican Brief." Those who expect the UN to solve all the world's problems are unrealistic; those who suggest it has ever had such broad pretentions are wrong. The UN was created by men and women who had just survived the second of two devastating world wars. These were not naive people. They understood, perhaps better than we, the frailties of humankind, and the yawning gap between how we would like the world to be and how it is; between promised behavior and reality. But they also understood the perils of missed opportunities and failed responsibility. During Senate debate on the UN Charter, Senator Arthur Vandenberg replied to those who thought the goals of the Charter unrealistic by saying that: You may tell me that I have but to scan the present world with realistic eyes in order to see these fine phrases . . . reduced to a contemporary shambles. . . . I reply that the nearer right you may be in any such gloomy indictment, the greater is the need for the new pattern which promises at least to stem these evil tides. The survivors of World War II understood quite well that although it was the better qualities of human nature that had made the UN possible, it was the lesser qualities that had made it necessary. Today, under the leadership of President Clinton, America is exploring the possibilities and perils of a new world. We are developing a new framework of policy and power that will protect our territory, defend our citizens, safeguard our interests, promote our values, and project our influence. In that effort, we will embrace opportunities for multilateral collaboration without forfeiting the prerogatives of leadership. We will strive to make international institutions serve the times, rather than spend our time serving institutions. In so doing, we will seek to build a world driven not by events we deplore, but by hopes we cherish; a world not without conflict, but in which conflict is effectively contained; a world not without repression, but in which the sway of freedom is enlarged. That is our mandate as we enter this new global era. And that is the future that--with your continued help--we can bequeath with pride to our children and to theirs. (###) ARTICLE 4: U.S.-Japan Economic Framework Talks Statement by Department Spokesman Michael McCurry, Washington, DC, January 19, 1994. Two sets of economic framework negotiations are taking place in the State Department during January 19-21: on foreign direct investment and on buyer-supplier relations. These are parts of the framework's "economic harmonization" basket chaired by Under Secretary for Economic and Agricultural Affairs Spero and Japanese Vice Minister of Foreign Affairs Matsuura. In the investment talks, the United States and Japan agree on the goal of increasing the presence of foreign firms in Japan and are now discussing the best measures to achieve it. Foreign direct investment in Japan, compared with most other developed countries, is very low relative to the size of the Japanese economy or to the level of Japanese outward investment. The United States believes that achieving a better balance in Japan's investment flows will help achieve a better balance in its trade flows. In particular, exports of many goods and services require a presence in Japan for such activities as distribution, market research, and after- sales service. U.S. negotiators have suggested a number of steps the Japanese Government could take to reduce the formal and informal barriers to increased foreign investment in Japan. These include steps on deregulation, tax policy changes, encouragement of mergers and acquisitions, land policy reform, government facilitation measures, and financial incentives. In the buyer-supplier relations talks, the two sides are addressing features of the Japanese economy that impede the formation of close and durable relationships between foreign suppliers of goods and services and Japanese buyers. Examples of such features include exclusionary buying preferences and other discriminatory private procurement practices by Japanese companies relating to product standards and "design-ins." Such anti- competitive features restrain imports into Japan's market. The United States proposes that the two sides focus on such measures as deregulation, competition policy, targeted financial incentives, industry-to-industry meetings, and information policy. The United States believes private sector involvement is essential to the success of this group. It has proposed bringing American suppliers and Japanese buyers together under U.S. and Japanese Government auspices, with particular emphasis on telecommunications, flat glass, and paper. The U.S. negotiating team is led by Alan Larson, State's Deputy Assistant Secretary for International Finance and Development, and the Japanese side by Risaburo Nezu, Deputy Director General for International Trade Negotiations of the Ministry of International Trade and Industry. Other meetings will be held with the goal of reaching agreements by July. (###) END OF DISPATCH VOL 5, NO. 4.
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