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Kodak in Japan 1/9/92 [OA 7565] [2]
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Kodak in Japan 1/9/92 [OA 7565] [2]
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Records of the White House Office of Speechwriting (George H. W. Bush Administration)
Speech Backup Chronological Files
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Originally Processed With FOIA(s):
FOIA Number:
S; 1999-0582-F; 1999-0586-F; 2004-2265-S
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Speechwriting, White House Office of
Series:
Speech File Backup Files
Subseries:
Chron File, 1989-1993
OA/ID Number:
13791
Folder ID Number:
13791-002
Folder Title:
Kodak in Japan 1/9/92 [OA 7565] [2]
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Section:
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Position:
G
26
22
2
2
THEMES AND TOPICS FOR PRESIDENT'S AUSTRALIA SPEECHES
(November 26, 1991)
There will be two opportunities for the President to make
major speeches while in Australia. The first will be in
Canberra on Thursday, January 2, when he addresses a joint
session of parliament. The general focus of this address
should be on the bilateral relationship, although global
regional themes should also be included. A second speaking
engagement will be on Friday, January 3, in Melbourne, where he
is invited to speak on regional/global themes at a luncheon for
business executives and others hosted by Victoria State Premier
Joan Kierner.
Parliament Address on U.S.-Australia Bilateral Relations
Themes to Include: Though largely focused on bilateral issues,
global themes should be included. The address should recognize
the close strategic relationship that has existed bilaterally,
the success of this relationship, and the need to maintain our
partnership in the face of post-Cold War era challenges.
Bilateral, regional and global economic issues should also be
touched upon. Finally, there should be reference to expanding
cooperation in other areas of particular relevance to younger
(post-WW II) Australians such as culture and education, the
environment, economics and narcotics.
Continuing Importance of the Alliance:
Our long-standing strategic alliance has served us well.
Next year we celebrate the 50th anniversary of the Battle
of the Coral Sea. It will be a special commemoration of
the close and special defense partnership that had origins
in the Second World War. (The President's personal
involvement in the Pacific theater during that war can lend
special significance to this testimonial.)
However, looking ahead over the next fifty years, the
post-Cold War Era presents new challenges for our
alliance. While East-West tensions have diminished, other
problems such as ethnic rivalries, nationalist aspirations
and territorial or political disputes -- suppressed during
the Cold War period -- are now arising.
THEMES
Page 2
In these endeavors, Australia has and continues to play an
important role:
-- Note contributions to the Gulf War, refugee assistance
and the ongoing naval interdiction effort in the
region. Express appreciation for Australian public
support during the Gulf War for the Coalition and its
policies.
-- Note Australia's active role in developing a framework
for the current peace process which is taking place in
Cambodia, as well as Australia's contribution to the
peace keeping force.
-- Note strong efforts on proliferation issues,
particularly regarding nuclear and chemical weapons
proliferation.
o
Our partnership on these and other issues has become
increasingly important, especially in the wake of the
tremendous changes that have occurred in the world over the
last two years.
Stress Cooperation on Multilateral Trade Issues:
o
The New Order that is being shaped encompasses not just the
political realm but the economic. Both our countries have
been at the forefront, pushing hard for free and open
markets in the world. We must avoid the creation of
trading blocs. And we must continue our joint efforts to
shape an international trading system which will foster
rather than obstruct free trade, particularly through a
successful conclusion of the GATT Uruguay Round.
-- Acknowledge Australia's leadership in establishing
APEC and in shaping its development as an important
international economic entity.
-- Note Australia's bipartisan efforts to press the EC to
end agricultural subsidies and for a successful
conclusion to the Uruguay Round.
-- Note that what we are pursuing in the NAFTA is not a
bloc. We intend to lower internal barriers, not
create external barriers. NAFTA will be GATT
consistent.
THEMES
Page 3
Reassure on U.S. Engagement in the Region:
Our reasons for remaining engaged and active in Asia and
the Pacific are obvious. The Asia-Pacific region is now
America's largest trading partner, with trans-Pacific
commerce totalling more than $300 billion in annual two-way
trade. This is nearly one-third larger than that across
the Atlantic.
We will remain committed to our allies and to fulfilling
our security obligations. The U.S. will remain engaged in
Asia and the Pacific.
Our bilateral and multilateral arrangements in this region
have worked well. These arrangements will continue to be
key to our mutual security in the decades ahead.
The regional partnerships which the U.S. enjoys with
Australia and other countries have provided the foundation
for economic and political stability in the region.
Future Relations Between Australia and the U.S.
We have points of differences, but overall our relations
are excellent. We share common histories and similar
values. And we see this relationship strengthening further
in the years ahead. Some trends to point to:
In culture and education:
--
Australian culture increasingly influences American
music, cinema and sports.
--
There is also a solid basis of bilateral academic
interchange, including the 40-year-old Fulbright
program in Australia and numerous private exchanges
involving younger Australians at the secondary level.
:
The U.S. 4-H organization, Future Farmers of America,
and Rotary are among the groups with active exchange
programs with Australian counterparts.
THEMES
Page 4
In bilateral economic relations:
--
The importance of bilateral trade: after Japan, the
U.S. is Australia's largest trade partner. Annual
bilateral trade exceeds US$ 13 billion.
-- U.S. firms have over US$ 15 billion invested in
Australia, the second highest in Asia after Japan,
much of it in leading edge technology in
telecommunications, aviation, and informatics, as well
as manufacturing, mining, agriculture, and energy.
Tourism remains very big business for both countries.
Nearly one-half million people travel each way each
year. United Airlines and Northwest both inaugurated
new routes to Australia in 1991.
-- We are broadening economic dialogue, this year
initiating bilateral consultations on agricultural
issues and continuing our consultations and joint
efforts in important international economic fora such
as APEC and the GATT.
In environmental and resource management:
--
Cooperation in conservation and environmental
protection is expanding; we have many shared interests
and similarities in resource endowments (i.e., coal,
oil, gas, hard rock minerals) and topography. There
are many recent examples of cooperation:
--
Our two governments have established a High Level
Group on Energy to exchange information on energy
policy, programs, demand; to review ongoing research
and development; and to engage in joint research
efforts.
-- US Interior Department (DOI) Minerals Management
Service has recently signed a bilateral MOU with
Australia's Department of Primary Industries and
Energy (DPIE) for sharing data on offshore minerals
development, including environmental protection
aspects.
THEMES
Page 5
--
DOI Bureau of Land Management has initiated a dialogue
with DPIE that is focused on the need to balance the
extraction of minerals, oil, gas, and timber with the
growing demands for recreation, and management of
cultural resources, and wildlife and fisheries
habitats. Plans include an exchange of technical
personnel between our countries.
:
USDOC/NOAA officials have recently met with their
Australian counterparts to discuss ways in which our
two nations can strengthen efforts regarding the
important environmental problems of driftnet fishing,
endangered species, and the monitoring/assessment of
the global warming threat.
--
In APEC, where Australia leads the Energy Working
Group, our two governments are cooperating closely to
establish a regional clean coal technology utilization
center.
--
The U.S. and Australia recently co-sponsored the
creation of an International Forestry Research
Institute to focus on issues related to the
conservation of tropical forests and the arrest of
deforestation and environmental degradation.
In fighting illicit narcotics:
--
Australia has done much to assist regional countries
in their counternarcotics efforts and is an active
member of the "Dublin Group" of donor nations that
coordinates counternarcotics aid to producer nations.
--
Our countries are united in the worldwide fight
against drug abuse and trafficking, which is becoming
a security threat of the 1990s.
THEMES
PAGE 6
Other issues:
O
There are some issues on which we do not meet eye-to-eye
but which should also be mentioned.
Encourage continued Australian support for an
ambitious Uruguay Round package including disciplines
on Trade Related Investment Measures (which Australia
continues to oppose) and services, where Australia has
been more forthcoming recently.
--
Australia remains on the Special 301 Priority Watch
list for local content requirements on television
broadcasting. This is barrier to cultural
interchange. We hope to see a phase-out, not a
phase-in, of local content requirements.
IPR: On parallel import of books, there have been
slight improvements in this area, but we urge the GOA
to adopt provisions that would completely exempt
foreign textbooks from parallel imports.
IPR: We also are concerned by the Australian
Attorney-General's rejection of a proposed amendment
to the copyright law to provide an exclusive rental
right for sound recordings. While Australia works for
stronger standards for IPR in the Round, its actions
at home are not consistent with this.
One particularly difficult issue is Australian continuing
concern over the impact on Australian farmers of the U.S.
Export Enhancement Program for agriculture. This issue
should be confronted sympathetically but directly:
--
Note the plight of American as well as Australian
farmers, our legitimate stake in world grain markets,
our intention to continue EEP as leverage on the EC,
and our hope that export subsidies will be sharply
reduced in the Uruguay Round.
THEMES
PAGE 7
-- Recognize and regret that EEP is a factor affecting
Australian farmers, but note other factors --
especially EC dumping, higher global production,
Australia's transport/port inefficiencies affecting
competitiveness, the drought, the high cost of
agricultural inputs, and the simultaneous collapse of
the wool market.
--
Stress that we take Australian interests into account
in implementing EEP, including setting up a bilateral
consultative mechanism that met in August for the
first time, and will continue.
Melbourne Luncheon Speech on Global/Regional Issues
Also
somphanze
busin
Overall themes: Begin with the changes in Europe and move on
to the latest initiatives in the Middle East and Southeast
Asia. While addressing the changing political winds in the
world, the President should also assure continued U.S.
commitment to regional stability in Asia and the Pacific.
Finally, focus should be placed upon international economic
issues of mutual concern.
Recognize Australia's Growing International Role:
o
Express appreciation for the leadership role Australia has
assumed in the world.
-- Australia's contribution to the Gulf War
-- Active role in working toward a settlement in Cambodia
-- Leadership in forming APEC
-- Strong efforts on proliferation issues, particularly
regarding nuclear and chemical weapons
Our partnership has become increasingly important,
especially in the wake of the tremendous changes that have
occurred in the world over the last two years.
THEMES
PAGE 8
U.S. Regional Role to Remain Strong:
The regional partnership which the U.S. has enjoyed with
Australia and other countries has been the foundation for
economic and political stability in the region.
Despite the changes elsewhere in the world, the U.S. will
remain engaged, concerned and active in Asia and the
Pacific, both in strategic and economic terms.
Facing Challenges Ahead:
o
This is not to say that there are no challenges ahead:
--
The proliferation of chemical, nuclear and biological
weapons of mass destruction remains a problem;
Australia's role in achieving international safeguards
to reverse the proliferation trend has been critical
to this effort.
--
We share a common view that the formation of
protective trading blocs must be avoided, and support
for cooperative frameworks such as APEC must be
vigorously continued.
--
We should do all we can to open markets and foster
free trade in order to strengthen international
economic cooperation, confidence and recovery.
SEANZ 1668
POSSIBLE LANGUAGE FOR THE PRESIDENT'S AUSTRALIA SPEECHES
(NOVEMBER 26, 1991)
INTRODUCTORY REMARKS
-- This is only my second visit to Australia, but my
impressions of your vast and beautiful country will always be
very special ones.
--- (Insert complimentary remarks on Canberra, Sydney and
Melbourne -- depending on itinerary. Could also make reference
to Australia's size by noting that several states the size of
Texas would fit in Western Australia.)
THE ALLIANCE
-- It isn't just Australia's natural beauty that draws
Americans "down under. " We share a long-standing friendship
established by the special alliance that has served our two
countries so well.
-- I was deeply moved by my visit to the Australian War
Memorial. It evoked memories of the sacrifices that both our
countries have made, often side by side.
-- Yanks and Aussies fought together in World War I, helping to
liberate France. The first U.S.-Australian military
cooperation took place when elements of the U.S. 33rd Division
joined Australian troops in the capture of Le Hamel, France.
-- And in World War II, our troops again fought side by side,
and half a million U.S. military men and women served in
Australia through that war.
-- Together, U.S. and Australian forces fought throughout the
Pacific, in tough land, sea, and air combat. Our alliance and
partnership has been solid ever since -- in Korea, Vietnam, and
most recently in the Persian Gulf.
RECOGNIZING AUSTRALIA'S INDEPENDENT INTERNATIONAL ROLE
-- While our close and important strategic relationship will
continue to be of great mutual benefit, Australia has matured
to become a positive force of its own in world affairs. We
welcome this; your views are valued and while we may not see
eye-to-eye on every issue, the direction of your policies are
complementary to our own. Let me cite some examples:
-- In the post-Cold War era, we are witnessing a reinvigorated
role for the United Nations. Much credit goes to Australia for
facilitating this.
2/2/2
-- Your initiative and persistance was key to shaping the
framework for the Cambodia peace settlement finally agreed to
by all warring factions last October. And Australia continues
to ensure that the process toward democracy and lasting peace
in Cambodia does not falter.
-- You were among the first to dispatch aid and technical
support under the United Nations Transitional Authority in
Cambodia (UNTAC), to which an Australian was appointed by the
UN Secretary General to command.
-- Australians also serve under the UN banner in the Western
Sahara and are a vital part of the Multinational Interdiction
Force, ensuring that UN sanctions against Iraq are enforced
under international law. In the Middle East, as in Cambodia,
you have been quick to provide humanitarian relief. Last May
your defence force provided medical teams and water
purification equipment and services to Kurds and Iraqis fleeing
Saddam's oppression.
-- But even long before the Gulf War, Australia had the
foresight to focus world attention on the problems which are
now emerging as key concerns for the world community. Thanks
to your efforts, the "Australia Group" was established in 1984,
and is currently comprised of 22 nations dedicated to
preventing the use and spread of chemical and biological
weapons throughout the world.
-- Australia also plays a lead role in international
economics. It was Prime Minister Hawke who pushed the idea of
a regional effort to promote freer trade by eliminating trade
barriers and establishing common policies. Through his vision
and efforts was born the Asia-Pacific Economic Cooperation, a
key economic forum we know as APEC. And since its first
ministerial in Canberra two years ago, APEC has succeeded in
mobilizing the support of all fifteen participants to push for
substantive progress in this key GATT Uruguay Round.
-- Clearly, Australia has established itself as a strong
promoter of multilateral solutions to important international
problems, be they military, social, political or social in
nature. And in large measure, your goals are shared by the
United States.
ASSURING CONTINUED U.S. ENGAGEMENT IN THE REGION
-- Let me take this opportunity to assure you that we, too, are
committed to remaining engaged throughout the world. There are
some naysayers who wrongly predict that recent events in Europe
and Asia will lead to a more isolationist America. This could
not be farther from the truth.
3/3/3
-- America tried to politically isolate itself from the world
in the past, and we ended up fighting two bloody world wars.
We also tried economic isolation that only helped to set off a
devastating world depression.
-- Current trends point to our strengthened engagement in Asia
and the Pacific in the decades ahead. This region has become
our largest and fastest growing trade partner. Two-way trade
between the region and the U.S. now amounts to more than $300
billion, nearly one-third larger than that across the
Atlantic.
-- American firms have invested more than $61 billion in the
region, and that will certainly grow. On the other hand,
investors from the Asia-Pacific have invested more than $95
billion in the U.S.
-- Our bilateral trade relationship with Australia is strong
and growing. Total bilateral trade exceeds US$ 13 billion,
having grown over 20 percent in the last five years. After
Japan, the U.S. is Australia's most important trading partner,
taking 12 percent of her exports, and providing 23 percent of
her imports. At US$ 14 billion, Australia is the largest
recipient of total U.S. direct investment in the Asia-Pacific
region, again next to Japan.
-- In everything from automobiles to microchips, from baseball
to Australian rules football, we grow closer -- not isolated --
with each day.
-- Cooperation and dialogue on economic issues can only benefit
our respective economies. We must continue this openness in
our relationship, and indeed work for greater openess in our
trade relations, particularly as we both continue to face
economic difficulties on the domestic front.
REMARKS ON THE EXPORT ENHANCEMENT PROGRAM
-- But while we generally agree on the goals, we sometimes
differ on the means. Our use of the Export Enhancement Program
to counter the agricultural subsidies of the European Community
is one point of difference.
-- Let me be clear in stating that I don't favor subsidy
programs. They are a burden to the taxpayer. They weaken the
mechanism and reduce the benefits of a free trading system.
And subsidies take the competitive edge out of industry.
-- But let me be equally clear in pointing out that we did not
start the wheat war. Talks with the EC on this issue had
previously led nowhere. And it is our farmers in the U.S. and
Australia who have been badly hurt by continued EC subsidies of
wheat.
4/4/4
-- We must both remember that the root cause of depressed
international agricultural prices, which have been hurting both
our farm sectors, lies with the European Community.
-- We are now seeing glimmers of hope. And I believe it is
because we have countered EC subsidies with the EEP.
-- The U.S. will be unwavering in its efforts to counter EC
subsidies with our EEP. I believe it is in the long-term
interest of all non-subsidizing nations that this pressure on
the EC be maintained.
-- At the same time, I have promised to do my utmost to limit
the harm that our EEP does to non-subsidizers like Australia.
I have also agreed to greater bilateral dialogue on this and
other economic issues of bilateral concern. On both points, I
have kept my word and will continue to do so.
-- Any mature relationship, even between close allies, cannot
be without differences. We must continue to seek understanding
and work to iron out our differences.
THE NEXT FIFTY YEARS
The Environment
-- We can be proud as we look back over the accomplishments of
the last five decades. But we can and must do more to expand
our bilateral relationship in ways which will be beneficial to
future generations of Australians and Americans. A key area is
the environment.
-- We share common energy interests which are derived from our
large domestic energy resource bases. Together, we are the the
world's largest coal exporters. Ministerial meetings were held
here last year to discuss upgrading our cooperative research
and development efforts in the area of energy.
-- At the ensuing high level group meeting held in Washington
last April, Australia and the U.S. agreed on the importance of
pursuing energy policies that will help promote our energy
exports while addressing environmental issues.
-- Together, U.S. Energy Department officials are working with
their Australian counterparts to develop clean coal technology,
energy efficient technologies, and other programs of importance
to the environment.
5/5/5
-- Our governments also have agreed to share information on
offshore minerals development, which include environmental
protection aspects. And there is an increase in our sharing of
experiences in balancing the extraction of minerals, oil, gas,
and timber with the growing demands for recreation, better
management of cultural resources, and environmental
preservation.
-- Our scientists also are working alongside your scientists to
better understand the global climate system. The U.S. National
Oceanic Atmospheric Administration, NOAA, collaborates with
Flinders University of South Australia in tidal research. NOAA
and the University of Tasmania also have a cooperative
arrangement for climate and global change research.
-- We are collaborating on providing regional governments much
needed information and training in preserving endangered
forests. Toward this end, the Australian and U.S. Governments
are co-sponsoring an International Forestry Research Institute
to address conservation, deforestation, and environmental
degradation.
-- And in managing the delicate balance of our ocean fisheries,
Australia and the United States have shared concerns over
driftnet fisheries for albacore and other tuna in the South
Pacific. We have joined other nations in remedying this
serious conservation threat to tuna stocks in the Pacific.
Cultural and Educational Interchange
-- I began my remarks today noting that Australia is a country
graced with much natural beauty. But it is really the spirit
of your people which has made it a country so admired by
Americans and others throughout the world.
-- We see this in the arts, with the creative works of
Australians in all media, including painting, sculpture, dance
and, of course, film making. And we hear it in your music,
where Australian artists remain extremely popular in the United
States.
-- We must continue to facilitate this rich interchange between
our people. Let me give you one recent example. Our Consul
General in Perth last November invited American musical artist
Paul Simon, who was in Australia then on tour, to meet with a
number of West Australian Aboriginal musicians in his
residence. After the guests had arrived, it was the
Australians who made the first move, setting up their
6/6/6
traditional instruments on the coffee table. Soon, Mr. Simon
and his fellow American musicians were receiving didgeridoo
lessons. And by the end of the evening, he was sharing a few
of his own skills with the guitar, completing an evening of
musical fellowship.
-- In Sydney, at a more institutional level, we have recently
initiated a Fulbright-supported American studies lecture series
at the University of Sydney American Studies Center. The
lecture series is a program which developed from Prime Minister
Hawke's initiative to begin a similar program at the Edward A.
Clark Center for Australian Studies at the University of Texas,
Austin, in 1989.
-- While we may have our differences over the EEP program, our
young people look beyond the present. In preparing for this
trip I was very pleased to learn that our 4-H program and our
Future Farmers of America have active exchange programs with
young people in your farm communities.
Easing Travel Access
-- Nearly one-half million Australians visit the U.S. each
year, and an equal number of Americans come here.
-- To facilitate freer travel between our countries, which
should be of help to both our tourism industries, my government
has offered to extend the privilege of waiving the issuance of
visitor visas to Australian nationals if the Australian
government agrees to allow reciprocal treatment for U.S.
nationals. Our offer stands, and I hope we will be able to
provide this benefit to our respective publics in the near
future.
-- And to help Australian investors who seek to do business in
the U.S., we are prepared to extend "E" visa privileges to your
citizens provided U.S. nationals are accorded reciprocal
nonimmigrant treatment.
-- These examples are real indications of the cooperative
spirit that exists between our two nations as we seek to
strengthen our economic, cultural and educational ties. They
are positive signs of the shape which our bilateral
relationship will take over the next five decades.
-- Let us continue to work closely together to ensure that the
future of our relationship will be as productive a partnership
as it has been over the last fifty years.
POSSIBLE THEMES FOR SPEECH IN SINGAPORE
Security/New World Order
-- My generation fought a world war -- in Asia and the Pacific,
in Europe, in North Africa. Those of us who experienced that
war vowed that it would be the last world war, that the forces
of totalitarianism must be resisted and their aggressive
designs frustrated. As visionaries, we founded the United
Nations; as prudent men and women, we also established a
structure of alliances to contain totalitarianism.
-- In the largest sense, we have achieved our goals. Despite
-- and perhaps in some ways because of -- the advent of weapons
of mass destruction, the threat of global war today is smaller
than at any time since 1945; indeed, it has almost vanished.
The specter of world communism has disappeared; state-
controlled economies are discredited; the democractic tide is
higher than it has ever been, with elected governments in many
nations on all continents; the advantages of the free-market
system are evident worldwide.
-- For many years the United States, by its military presence
and its influence, has fostered stability in several parts of
the world. Nowhere have the benefits of that stability been
greater than here in East Asia, where many nations have
prospered to a degree beyond anything that might have been
imagined 20 years ago: first Japan; then the Dynamic Asian
Economies of Singapore, Hong Kong, the Republic of Korea and
Taiwan; and now Malaysia and Thailand. Others such as
Indonesia are following rapidly. Economic growth in East Asia
today far outstrips growth anywhere else in the world.
-- The alliance structure succeeded in containing
totalitarianism and preventing global conflict, but it did not
preclude smaller wars or other kinds of regional or local
conflict. We are still dealing with some of those situations,
but the end of superpower rivalry has made the search for
solutionsd more productive. We have reached a stage at which
we can realistically discuss what I have called the New World
Order, under which nations will resolve their disputes without
resort to the use of force.
-- We have already seen the United Nations take on new vitality
and begin to exercise the role its founders intended for it,
most notably in rolling back the invasion of a small state,
Kuwait, by a much larger one, Iraq. We have enjoyed good
cooperation from the Soviet Union in convening a historic
Middle East peace conference.
-- Here in Southeast Asia multilateral diplomacy has achieved
what we trust will be a notable and lasting success: the case
of Cambodia. I will not try to trace here the history of that
-2-
unhappy country -- a history in which the United States itself
is of course involved. But I want to record my appreciation
for the solidarity of Singapore and four other ASEAN members
with Thailand, the nation immediately threatened in the 1970s
and 1980s by the potential spillover of combat. More recently,
another ASEAN member, Indonesia, together with France, has led
the search for a settlement, in which the four other Permanent
Members of the Security Council have joined, together with the
United Nations, Australia, Japan and other governments. That
long search reached a milestone six weeks ago in Paris with the
signing of the settlement documents.
-- A settlement in Cambodia truly means the start of a new
era. For virtually the first time since World War II,
Southeast Asia is without serious conflict. For the United
States, that settlement makes possible a process of healing in
our relations with the states of Indochina: representation in
Cambodia for the first time since 1975, accredited to the
Supreme National Council headed by Prince Norodom Sihanouk; a
restoration of our diplomatic relations with Laos -- never
broken -- to the pre-1975 level; and the start of the process
of normalization with Vietnam. Just how far and how fast we
move in that process with Vietnam will depend on progress in
resolving the cases of our military personnel missing in action
-- but the trend in recent months has been decidedly positive.
-- For the people and the governments of Indochina, the
settlement in Cambodia holds great promise. The embargos on
trade and investment which many governments imposed can now be
lifted; travel and communications can be opened up; the
international financial institutions will be able to lend
freely for worthwhile projects. Most important, perhaps,
Vietnam, Laos and Cambodia will be able to emerge from their
isolation and, if they chose, free themselves of the policy
constraints that have hindered their development. In fact,
Laos and Vietnam in recent times have both shown a
receptiveness to foreign private investment. The United States
looks forward to this new era, as, I am sure, do the peoples
of Singapore and the other five ASEAN nations.
-- Clearly, then, the situation in East Asia has improved in
recent months, as has the world situation generally. But we
remain in a transitional phase; we cannot wish away continuing
threats to peace and stability in such areas as the Korean
peninsula, and we cannot rule out sudden threats to world peace
and the rule of law such as the one that arose in the Persian
Gulf only sixteen months ago.
-- For those reasons, the United States will remain engaged
militarily in East Asia and the Pacific for the foreseeable
future. Here, as in Europe, we will take advantage of reduced
-3-
levels of threat and of increases in the speed, range and lift
capability of our ships and aircraft to slim down our
forward-deployed forces and the number of our bases. The
character of our presence will change; we will place more
reliance on access to a larger number of facilities owned and
controlled by others. Our total numbers may be reduced, but
our presence in the region could be more widespread and more
frequent.
-- The agreement signed in Tokyo a year ago by then-Prime
Minister Lee Kwan Yew and Vice President Dan Quayle exemplifies
this new type of arrangment. Under its terms, our ships and
aircraft -- based elsewhere -- are making increased use of
Singaporean military facilities. They exercise jointly with
Singapore's forces as well as on their own. They are gaining
familiarity with the geography and the operating conditions of
this part of Asia. We are open to the possibility of similar
arrangements with other nations of the region.
-- The eruption of Mount Pinatubo in the Philippines in June
settled the fate of Clark Air Base there. If we are able to
remain at Subic Bay, we shall do so, but if not we shall
continue to honor our treaty commitments. We have already
relocated headquarters, troops and equipment to Guam.
Meanwhile, United States forces will remain in Japan and
Korea. Our treaty relationship with Australia, the country I
shall visit next, is stronger than it has ever been. We hope
the day will come when New Zealand allows us to resume defense
cooperation under the historic ANZUS alliance.
-- In short, we will stay on the scene in East Asia. The test
of our security policy, or of any nation's, is not the size or
location of our forces; rather, it is the ability to deal with
any and all likely threats to the peace, and to deal quickly
and decisively with unpredictable crises, and that is precisely
how the United States and its partners in the multinational
coalition -- acting through the United Nations -- dealt with
the Iraqi invasion of Kuwait.
Economic Cooperation
-- Interdependence and cooperation are equally important in the
world economy. That lesson is fully understood here in
Singapore, where total trade is three (??) times the value of
your gross domestic product. If the prosperity that so much of
East Asia already enjoys is to continue and spread, we must
have an open global trading system. To reach that goal, we
need a framework for economic integration, and we must avoid
regional fragmentation.
-4-
-- Trade across the Pacific has expanded dramatically in recent
years, in step with dramatic economic growth in many East Asian
countries. Some ten years ago America's trade with the Pacific
surpassed our trade across the Atlantic; today, it is nearly
one-third larger. The ASEAN countries, taken together,
constitute America's fifth-largest trading partner. Singapore
alone is a bigger export market for U.S. goods than Italy,
Spain or the USSR. Nations on the eastern rim of the Pacific,
from Mexico to Chile, are eager to join in this booming
trans-Pacific commerce. I urge U.S. firms take advantage of
these dynamic markets and to redouble their efforts to export
to and invest in the ASEAN countries.
-- The Pacific Basin is a natural trading region, and it is
logical that the governments of the region concert to promote
that trade by eliminating barriers and establishing common
policies. An excellent forum for doing so already exists: the
Asia-Pacific Economic Cooperation, or APEC, grouping. The
concept had occurred to a number of people in several
countries, but it was Prime Minister Bob Hawke of Australia who
developed the idea and convoked the first APEC ministerial
meeting in Canberra two years ago.
-- APEC has since met twice more, here in Singapore last year
and again last month in Seoul. Its original group of twelve
participants has grown substantially with the simultaneous
addition of China, Hong Kong and Taiwan, and APEC can look
forward to further growth in the years ahead.
-- APEC is performing many useful functions, but none is more
important than mobilizing the support of all fifteen
participants for a successful conclusion of the Uruguay Round
of multilateral trade negotiations to update and extend the
system known as the General Agreement on Tariffs and Trade.
The nations of APEC are convinced that the GATT system must
cover world trade in agricultural products, as it has long
covered manufactured goods, and that it must be extended to new
realms such as intellectual property rights, services, and
investment.
-- The alternative is a likely failure of the global trading
system, a reversion to exclusionary trading blocs, and,
eventually, the constriction of world trade. It is incumbent
on all of us -- in North America, in Asia, in Europe -- to
overcome parochial interests, abandon protectinist rules and
tactics, and expose our economies to the rigors of competition.
-- Even while we pursue reform of the global system in the
Uruguay Round, we can reduce and eliminate barriers to trade
with our immediate neighbors. That is what the United States
and Canada are doing right now, and what we and Canada propose
-5-
to do with Mexico, thereby creating a North American Free Trade
Area, or NAFTA, which will have few internal barriers and will
be more accessible than at present to other world traders such
as Singapore.
-- Thailand has proposed that ASEAN establish a free-trade area
of its own over the next fifteen years, and the other five
governments have agreed. Such action is the direct parallel of
what we in North America are doing in NAFTA, and the United
States applauds this decision by the ASEAN nations.
The Spread of Democracy
-- The most inspiring single event of the last few years was
the tearing down of the Berlin Wall. The Wall symbolized the
worst of totalitarianism, and its destruction stands for the
desire of people everywhere to control their destinies and to
be governed only by their own consent.
-- To a gratifying degree, that is happening. The democratic
impulse is alive, whether fed by relative proposerity, as
seemed to be the case in China, or by economic failure, as in
the Soviet Union and Eastern Europe. And in many places the
impulse is flourishing. In recent years elected governments
have come to office everywhere from the Philippines to Poland
and from Nicaragua to Mongolia.
-- There are basic human rights, universally recognized though
not universally observed, but there is no copyright on
democracy and no one form of government or set of practices to
which every nation must adhere. The United States recognizes
the legitimacy of diversity.
What the United States cannot condone, however, is the
suppression of the popular will -- and that is what has
occurred in Burma, where the military leadership permitted
elections last year but, when the results proved not to the
military's liking, refused to allow the winners to take their
rightful seats and organize a government. So long as this
situation continues, the people of Burma will remain victims,
subject to torture and intimidation and deprived of the chance
to share in the general properity and well-being which so many
of their neighbors already enjoy.
(NEEDS CONCLUSION)
MORE
SOUTHEAST ASIA SPEECH IDEAS
31 years ago this month, on a cold, snowy day in
Washington, newly elected American President John Kennedy
articulated Americas commitment to our friends and allies
throughout the world. That we would stand with them in
their efforts to resist Communism, embrace freedom and
support efforts to develop economically and thus improve
the lives of their people.
-- It was a commitment that was to bear a heavy price,
over 58,000 dead in Indochina and billions of dollars
spent on assistance and maintaining a military presence in
the region.
-- But it was a commitment that has been shared by
Republican and Democratic presidents alike.
-- It is appropriate that standing here now in a country
which represents one of the most remarkable economic
success stories in the world, we can look back and see
that the outcome we all worked and sacrificed for has
indeed become a reality.
-- It is with great pride that I say that history will
record that America did indeed keep its commitment to its
friends in SE Asia and that together we have built a
region which is at once free, at peace, and experiencing
unprecedented prosperity, part of the new world order
which offers the promise of enduring global stability.
-- To judge just how far we have come and to see what we
have accomplished, it is instructive to look back 25 years
and recall the situation in SE Asia at the time Singapore
was first charting its independent course.
-- In January 1967, the concern was about the rapid spread
of Communist ideology. Almost every country in SE Asia
had or was about to have an active Communist insurgency.
-- As the war in Vietnam raged, from Jakarta to Rangoon
and from Bangkok to Manila, the worry was about falling
dominoes. The nightmare vision was of a radical ideology
being imposed throughout the region.
-- It is important to keep in mind that while there was a
large U.S. military presence in the region in the mid
60's, U.S. economic interaction with Southeast Asia was
still rather small.
-- On the eve of the Tet offensive, the U.S. had a higher
trade turnover with Latin America than with East Asia.
-- Today, the situation is dramatically reversed. The
steadfastness of our military commitments and the
stability which they promoted, gave the countries of the
region time to grow economically and deal effectively with
the political challenge. Having collapsed in Europe and
the Soviet Union, Communist is no longer a viable threat,
and is acknowledged as a failed and bankrupt economic and
political philosophy.
-- Democracy, personal freedom and free market economies
are demonstrably the keys to real improvement in the
quality of people's lives.
-- And this has been accompanied by an explosion in trade
between the U.S. and Southeast Asia, particularly the six
ASEAN countries.
U.S. two way trade with Singapore grew from 2
billion dollars to 20 billion dollars since the
end of the Vietnam War.
In the same period, Thailand went from 700
million dollars to 9 billion dollars.
-- This has made the U.S. ASEAN's number one customer. We
take one fifth of all of ASEAN's exports, while ASEAN
imports from the U.S. have increased 1600 percent since
1975.
-- As a result, today U.S. two way trade with ASEAN stands
at over 46 billion dollars - just about equal to our
commerce with Germany - and exceeded by only three other
U.S. trading partners.
-- To put it in better perspective, in 1990 the U.S.
exported:
More to Singapore than to Italy or Spain
More to Thailand than to India
More to Malaysia than the Soviet Union
More to Indonesia than all the rest of Eastern Europe
put together.
-- But it is not just trade that has brought us closer
together.
-- Satellites and the expansion of telecommunication
technology mean that more messages and images are going
back and forth between our people than ever before.
In 1975 there were about 300,000 T.V. sets in
Indonesia, today there are 7 million (and it seems at
least that many more for sale in all of Singapore
shopping malls.)
Direct dial long distance phones and FAX machines
means someone in Manila, the Philippines can place an
order in Manila, Iowa in less than a minute.
-- We understand each other because of the flow of people
between us.
In 1975 there was only slightly more than a million
Americans of Southeast Asian origin.
Today that figure has quadrupled to over 4 million,
including one senior member of my White House staff
Sicwan Siv who survived the horrors of the Khmer Rouge
run Cambodia.
Based on this population of SE Asian origin, the U.S.
would rank as the fifth largest ASEAN country.
There are more Lao in the U.S. than in Vientiane
There are more Filipinos in California than in Cebu.
-- All of these developments - people telecommunications,
jet aircraft, trade, investment, security commitments, and
common belief in economics and freedom have created a web
of interaction, knitting us together as never before.
-- Our challenge is to use this structure to promote
continued peace, stability and increased economic
progress. And common efforts to deal with the challenges
we face in terms of the environment, narcotics, human
rights and other scientific and technical areas such as
public health.
-- There are two mechanisms which promote and enhance this
new reality:
The ASEAN-Post Ministerial Dialogue in which our
foreign ministers and those of ASEAN's other
dialogue partners meet to discuss issues and
coordinate approaches to dealing with problems;
and
APEC, which offers the increasingly real promise
of cooperation on the full range of economic
issues across the entire Asian-Pacific region.
-- Having invested so much in this region in terms of
American lives and national treasure and having attained,
together with you, so many of our policy goals, the U.S.
is not now going to turn its back on South East Asia.
-- The U.S. is committed to meeting its obligations in SE
Asia and will continue to play the positive role by
maintaining our military presence, even with our three
year phase out from Subic Bay.
Our new Access Agreement with Singapore contributes
importantly to this goal.
-- The U.S. is committed to a successful transition to a
freely elected government in Cambodia. In that regard, I
am today announcing that the U.S. has lifted its trade
embargo and all other economic restrictions against
Cambodia. This should permit increased economic activity
which will help solidify and maintain the process.
-- The U.S. is prepared to move forward in our
relationship with Vietnam, provided that progress
continues to be made in Cambodia and on our POW/MIA issue.
The countries of Indochina have real promise for
economic growth if there can finally be an end to violence
and they join the rest of the region in emphasizing
development.
-- The U.S. is committed to working productively with our
friends in addressing global problems and so therefore I
am today announcing a new environmental initiative aimed
at enhancing our work together in preserving our planet
and natural resources.
-- We are truly embarking on a new era - one in which the
last remnants of the Cold War are being put behind us
-- For America, our Vietnam syndrome is a thing of the
past.
Konos
National Assembly-Speech themes (DRAFT)
Thank you -for providing me with this opportunity to speak
to you again. Since I last spoke here in February 1989 the
world has changed immensely. We have in fact entered a new
era in world history.
We are very pleased with the triumph of freedom and free
enterprise economics throughout most of the world, and with
the continued progress, economically and politically, of
the Republic of Korea. However, we remain saddened by the
persistent conflicts in many parts of the world, and by the
continued division of the Korean peninsula, a situation
that is anachronistic in the post-Cold War world.
As we have stated on numerous occasions, the United States
supports the peaceful unification of Korea on terms
agreeable to all Koreans. We believe that North/South
dialogue offers the best path toward eventual discussion O
unification and related issues. Consequently, we support
strongly the Prime Ministerial dialogue that has been in
progress for more than a year, and stand ready to
facilitate in any appropriate way.
Our support for the process of peace does not, however,
blind us to reality and to the threat from the North that
still remains. Therefore, our commitment to the security
of South Korea remains as strong as ever, and we will
continue to consult on matters that affect our mutual
interest. To further strengthen security in the region,
both of us should also consult and cooperate with our
friends the Japanese, who have the economic power to play a
vital role in promoting regional stability.
We continue to regard the unsafeguarded nuclear program of
North Korea as the greatest threat to security in region,
and call upon the leaders of that country to meet the
international obligations it accepted when it acceded to
the Non-Proliferation Treaty in 1985.
North Korea should know that neither the United States nor
the Republic of Korea poses a threat to its society or way
of government. However, we cannot ignore the situation as
North Korea builds nuclear weapons, and will use all
diplomatic means to assure that it meets its international
obligations under the International Atomic Energy Agency
(IAEA).
As we begin this new era in international relations,
U.S.-Republic of Korea relations are growing in many
areas. With the Cold War behind us, we are transforming
our relations from a security relationship to a
broader-based security, economic, and political partnership.
Of crucial importance in this transformation is your own
progress toward democracy, well illustrated by the enhanced
prestige and power of this body. The ROK's movement to a
democratic government, with the military clearly
subordinate to civilian government, has been crucial in
winning for you the respect of the international community
and the stability and credibility necessary for an
influential world role.
The challenge now is to continue down the road toward full
democratization. You have won the political contest with
the North and should consider amending your National
Security Law, which provides a propaganda advantage to the
North, to take account of your strength and confidence.
Further steps in democratic development might include
greater accountability for public officials and greater
transparency in both your political and economic systems.
Initiatives in these areas would be consistent with your
overall economic and political modernization, and would
further strengthen your position vis-a-vis the North.
The ROK's democratization is but one of the features that
distinguishes it from North Korea, but it is one of the
most important, and it is an achievement which should make
all Koreans proud.
Another of the ROK's greatest accomplishments has been
membership in the United Nations. Your entry in the United
Nations was long overdue, and your ultimately success is
due in large part to wise leadership and persistent
effort. However, South Korea's emergence as a full member
of international political and economic institutions,
carries with it added responsibilities.
Over the years, the Korean people have gained tremendously
from the open international trading system. Indeed open
markets for exports have been a major contributor to your
new prosperity. Korea has now become an economic power in
the region and the world.
Now it is time for the ROK to lend its support to the open
international trading system from which it has prospered by
actively supporting the Uruguay Round of negotiations,
opening its own domestic market to foreign products, and
liberalizing its financial system. Your support is vital
to assure that the international trade system remains open
and that countries like Korea can continue to prosper.
The U.S.-ROK friendship has now endured more than four
decades of dramatic world events. Yet in the beginning,
our close relationship was not one that either of us
sought, but rather one into which we were both thrust as a
result of World War II.
In those years the U.S. entered into its relations with
Korea with a keen sense of responsibility, and with
determination to preserve the benefits of freedom for the
Korean people. It demonstrated its commitment during the
Korean War, when more than 33,000 American soldiers and
thousands more Koreans, both military and civilian, died to
keep freedom alive.
Clearly, over the past forty years the American role in
Korea has not always been a easy one, and the political
environment in East Asia has frequently been one of
crisis. Consequently, in carrying out what we perceived to
be our responsibilities we have made mistakes.
Yet we entered the relationship with the Republic of Korea
with the highest ideals, and we have, I believe, pursued
the correct path in the long run. Therefore, we too are
enourmously proud when we see the great nation you have
built from the ruins of war.
Today, we again approach the future in the aftermath of a
war--a Cold War, and together we have the opportunity to
shape and influence a new era as much as we did nearly 50
years ago. We can also define for the next generation a
new relationship, a partnership that encompasses much more
than merely security cooperation.
Our new partnership should be political, economic, nad
cultural, as well as security. I urge the people of both
countries to look toward the future rather than the past,
and to seize the moment to build on our excellent
relations, to expand cooperation so we all benefit, and to
march into the future as friends and neighbors working
together to build a safer and more prosperous world
community.
Sensitive issues which the Embassy thinks should be addressed
explicitly:
1. Make clear our willingness to continue consulting with the
ROK on security issues.
2. Describe how we see the Japanese role in the region
complementing ours and that of the ROK.
3. Make it clear that transparency and accountability are
important to Korea's economic relations with the rest of
the world.
4. State clearly what the DPRK must do for improved relations
with the U.S.
5. Make it clear that the National Security Law plays into
Pyongyang's hands and can be counterproductive to the ROK's
North-South goals.
Remarks to American Chamber of Commerce
Themes could include:
-- Strong support for the work of the U.S Chamber of
Commerce, which has been vital to U.S. business
interests in the ROK.
-- Korean economic maturity and U.S./Korean
economic/trade interdependence have brought the two
nations to a new era of partnership.
-- Mutual interest in further development of open,
liberal international trade and financial regimes, in
particular, successful conclusion of UR.
-- Responsibility on both countries to ensure that their
domestic trade and financial markets are open and
liberal for the other; that domestic markets are
fully integrated into international trade and
financial regimes; and that their producers and
consumers understand the benefits of two-way open,
liberal markets.
At a science/education/technology event themes could include:
-- The long history of U.S. support for Korean science
and technology; nuclear energy is a good example.
-- Our admiration for the great strides Korea has made
in developing its technological base;
-- Recognition that scientific and technological
development can only flourish where the economic
value of the intellectual property associated with
discovery is protected for the benefit of the
discoverer.
-- Our willingness to continue and enhance cooperation
with Korea, symbolized by the U.S.-ROK Science and
Technology Agreement;
-- Our confidence that Korea will be able to make
significant contributions to world scientific
research and technological development.
-- Recognition that Korea can now assume rights and
responsibilities shared by other industrialized
countries in world scientific research and
technological development through;
a. Greater contributions to the world scientific
knowledge by increased basic research funding and
b. Cooperation with U.S. and other countries through
participation in basic megaprojects such as the
Superconducting Super Collider (SSC)
Themes/Phrases for Presidential Speeches
Camp Casey
Thirty years ago, in 1961, President John F. Kennedy spoke
within sight of the Berlin Wall and lamented the divisions
between people there at the front line of the Cold War.
As he spoke, the barrier a few miles from here, the DMZ, stood
as a parallel tragic division between peoples.
As we celebrate the end of the Cold War and the overcoming of
barriers between peoples throughout the world, it is tragic
that that barrier remains, the last remnant of the Cold War.
It also stands as a visible reminder of the ideological battles
which once divided the world, and now continue sadly to divide
the Korean people from one another.
For over forty years the United States has been proud to have
played a role in assuring that that barrier against renewed
aggression was strong and steadfast.
All Korean war veterans and the men and women who have
participated in this important and vigilant effort to protect
freedom should be proud of their contribution to Korea's
security.
Throughout that effort, the United States has consistently
looked forward to the day when that barrier would no longer be
necessary, when the very real threat of North Korean aggression
would be no more.
As I stand here today within sight of the Berlin Wall of Asia,
I renew that hope and that appeal, that someday soon there will
no longer be barriers between peoples striving for unification
and reconciliation.
The atmosphere for leaving behind the fears and hatreds of the
Cold War has never been better. The support of the
international community for a peaceful unification of the
Korean peninsula has never been stronger.
I can look forward to the day when it is no longer necessary
for U.S. troops to be stationed in Korea to defend against the
threat of North Korea, when that threat is relegated to the
history books, when North Korea becomes fully committed to
resolving its differences with our good friend and ally in the
South.
Until that time, I assure the North that our commitment to the
security of the South remains rock-solid and unwavering.
Nothing will ever change that commitment or the equal
commitment to have available the means to protect our ally, the
Republic of Korea against aggression.
But there remains a parallel commitment to move toward improved
relations with North Korea, as long as it remains an
independent state, and to cooperate in ways which can enhance
the security of this region and the welfare of its people. The
North knows what it will take to achieve that objective, and I
hope to see significatn movement in that direction in the near
future.
I know that the people of South Korea and North Korea both are
committed to unification, and I assure them that the people of
the United States are in full and complete support of that
objective.
Earlier today I endorsed President Roh's call for a
multilateral approach to resolving the security problems of
this region. The United States will do all in its power to
make this endeavor a success. We can do no less to enhance the
security of our Korean brothers, both South and North.
Thus I call on North Korea to come out from behind those
barriers, from the bastions of military strength, to present to
your countrymen the hand of peace and reconciliation.
I for my part offer my hand to North Korea across the divide.
Come, work with us for peace and security on the Korean
peninsula, in the Northeast Asia Region, and in the world.
Key Elements for the Presidential Speech in Japan
Historical Setting
-- Friendship between the two nations has deep roots.
Even before Commodore Perry sailed into Shimoda with his
black ships in 1853, a young man from Kyushu named John
Monjiro had found his way to Boston and begun the process
of cross-cultural communication. It is important to
remember that except for the dark period of the 1930s and
early forties, productive relations between the two
countries have been the norm.
-- It is in this context that the American people
approached the commemoration in Hawaii of the fiftieth
anniversary of Pearl Harbor. We see this event and the
war that followed as an aberration in the long positive
history of our relationship. As we pay tribute to those
who died in the conflict, we will take pride in the strong
US-Japan alliance relationship that both countries have
built since, the end of the war which has made a major
contribution to the prosperity of both countries and is
the foundation of peace and stability in Asia today.
The enduring importance of cooperation
-- Rarely in history have two nations with such different
geographic and cultural roots formed such an enduring
relationship. This relationship is based on shared
interests and values and an appreciation of the mutual
strategic, economic, and political benefits both countries
derive from close cooperation.
-- The basis for cooperation is stronger today than it has
ever been.
- The US-Japan Security Treaty remains the cornerstone
of stability in East Asia, a region that still has a
range of unresolved conflicts. This treaty allows the
US to maintain forward deployed forces in East Asia
which serve American, regional, and we believe,
Japanese interests. Close cooperation between our
military forces and the two-way flow of defense
technology makes the most efficient use of our defense
resources and helps maintain a strong political link
between the two countries.
-- Our economies are increasingly interdependent;
Japan will sell about $90 billion worth of goods and
services to the US this year and the US will sell more
than $40 billion to Japan, making each country the
others' largest overseas trading partner; Japanese
investment in the US creates more than
jobs
and is an important source of technology and
management innovation for the American economy.
-- The US and Japan are the world's two largest donors
of foreign economic assistance and are destined to
play key roles in addressing regional and global
issues by virtue of their economic strength and
political interests. These roles can best be
performed by working together rather than
independently.
-- The human connections between us are growing.
There are more Americans working and studying in Japan
than ever before and there are more Japanese residing
in the US.
America as a Pacific player
-- The US has been a major player in the Pacific
throughout the twentieth century but it is only recently
that Americans have become aware that their country's
future orientation will be as much toward the Asia-Pacific
region as toward Europe. America's trade with Asia
exceeds our trade with Europe. Asian-Americans are the
most rapidly increasing ethnic group in America and are
becoming political active. And American security
continues to be vitally linked to the security and
stability of the Asia-pacific region.
America's View of Japan
-- For America, Japan is the center of Asia, and US
relations with Japan are the heart of our policy toward
the Asia-Pacific region.
-- As seen from Japan, there may be the impression that
most Americans see Japan in negative terms. Polls show
the "Japan challenge" ranking ahead of the "Soviet
challenge"; and various books and articles predict a
crisis in US-Japan relations.
-- These opinions are present in the US, but the vast
majority of Americans admire Japan's economic performance,
have warm feelings toward the Japanese people, and regard
Japan as an indispensable partner for the post-Cold War
era.
-- Let me say a word about the impact of the Gulf crisis
on American views of Japan. There was considerable
criticism in the US press and in the Congress of what was
seen by some as Japan's slow and reluctant support of the
coalition effort, but this negative impression has all but
disappeared. In fact there is now widespread appreciation
of Japan's extremely generous $13 billion contribution to
the effort, $10 billion of which went to the United
States, and to the strong political support of your
government. We know the Gulf crisis raised many
fundamental questions in Japan about your country's
appropriate role in such coalition efforts and that
reaching a consensus takes time. This is an issue for the
Japanese people and the Japanese political process to
decide, but we welcome efforts Japan has made to
participate more directly in peace keeping operations.
Managing US-Japan Relations for the Future
Global Partnership
-- We see a "global partnership" between Japan and the
United States in which the two countries will work in
close collaboration to bring their political,
technical, and economic resources to bear to address
regional and global issues.
-- Global Partnership will be an "equal partnership"
-- we will work together to define common objectives
and our respective approaches to these objectives.
-- Global Partnership will not be exclusive, nor will
it represent a US-Japan condominium. We will welcome
the participation of other like-minded countries and
international organizations.
Addressing Economic Issues
-- Global partnership can only succeed if we manage
the competitive aspects of our relationship, notably
in the economic area.
-- We have made great progress in the last few years
in addressing various sectoral problems and the
Structural Impediments Initiative (SII) talks have
broken new ground in addressing the sources of tension
in our trading relationship, but more needs to be
done. We welcome the agreement of your government to
reinvigorate efforts in these areas.
-- Nothing is more important to sustaining the free
trade system that the success of the Uruguay Round.
Japan and the United States benefit greatly from free
trade and we bear a special responsibility for the
successful conclusion of the round. We look to Japan
-- Fifty years ago we fought a tragic war. Today we are
each others' indispensable partners in trade, investment,
defense, and regional and global affairs.
-- The Cold War helped create this partnership, but
cooperation between the US and Japan does not depend on
the external pressure of the communist challenge. Rather
our alliance is based on fundamental shared interests in
virtually all fields, and the reasons for cooperation are
stronger today than ever before.
-- It is up to the leadership in both countries to ensure
that the competitive aspects in our relationship are
managed effectively so that this cooperation can go
forward. If we fail, we will have missed an historic
opportunity; if we succeed, our citizens, and the citizens
of the world can look forward to a more prosperous and
stable future. I welcome the commitment of Prime Minister
Miyazawa to this joint enterprise and I make the same
commitment.
to play a leadership role as we tackle the last
remaining, and the most difficult, issues, including
agricultural liberalization.
The US Domestic Agenda
-- We recognize that our bilateral trade imbalance
reflects far more than the impact of remaining market
barriers in Japan. Japan's products are competitive
around the world because Japan has saved and invested
at a rate double that of the US, focused on applied
research and development and new manufacturing
technologies, established the world's best quality
control systems, developed a highly educated labor and
managerial force, and taken a long term view to
developing markets abroad. There is much that America
should emulate in Japan's example. We are taking
steps to improve our competitiveness -- reducing our
budget deficit, improving education, and enhancing our
productivity.
-- The United States is going through a difficult
economic period, but we have tremendous fundamental
strengths to draw on. American basic research is
still the best in the world; our best universities are
the world's best; American technology in such advanced
fields as computers and biotechnology is at the
leading edge; and we have a diverse, energetic,
creative, and talented population.
-- But we need make more productive uses of these
basic strengths to prepare our economy and society for
the competitive challenge of the 21st century.
The Human Connection
-- For all of our interaction and interdependence, the
US and Japan need to know a great deal more about each
other. Much is already being done in this area.
There are more than 1000 young Americans teaching in
Japanese schools under the JET program, and thousands
of Japanese are studying in the US. We welcome the
Abe fund to support greater exchanges between the US
and Japan and we are committed to supporting this and
other initiatives. Thanks to these programs, by the
end of this century both Japan and the United States
will have a much larger group of people who have lived
in each other's country, speak each other's language,
and understand more fully the great importance of our
bilateral relationship.
Concluding Flourish
12/16/1991 09:47 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.01
FACSIMILE TRANSMISSION
Eastman Kodak Company
343 State Street
Rochester, New York 14650-0519
DATE: 12/16/91
TO:
Bob Simon
Ext. Fax No.: 202.456.6218
Location:
The white House
KNet fax:
Phone No.:
FROM:
Kristine Kappel
Name:
Int'l News
Ext. Fax No.:
716-724-9829
Location:
C&PA
KNet fax:
Phone No.:
716-724-1004
Total number of pages including Cover Sheet: 24
Mr. Simon:
Here's the information you required on
Kodak's RED facility in Japan. Please
let me know if you need additional
information or assistance.
Thank you.
Regards-
Keis Kappe
12/16/1991 09:47 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.02
1700
Kodak
KODAK ANNOUNCES COMPLETION OF JAPAN
RESEARCH AND DEVELOPMENT CENTER
ROCHESTER, N.Y., Oct. 4 -- Eastman Kodak Company today announced the
completion of its Research and Development Center in Yokohama, Japan.
The four story complex, under construction since June of last year, has
nearly 195,000 square feet of floor space, and is situated on 4.37 acres of
land in the Kohoku Newton section of Yokohama.
The center will conduct research in optoelectronics, systems hardware, and
Japanese software in support of Kodak's information systems products.
Activities will include design and fabrication of semiconductors, development
of electronic and mechanical systems and writing software for Japanese
language products.
Kodak President Kay R. Whitmore, in Japan for the introduction of Kodak
Ektar color negative films, said, "This facility will allow us to gain access
to Japan's large technology base in electronics and will support our efforts
to develop innovative products for worldwide markets."
The center is Kodak's newest research laboratory and the biggest single
Kodak research investment outside of the U.S. Total cost of construction,
including property acquisition, is in excess of $74 million.
The center becomes operational on Oct. 17 when approximately 100
engineers, scientists and support staff begin their work. Staff is expected
to grow to 250 people.
MORE
12/16/1991 09:48 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.03
-2-
Kodak's announcement of Ektar 25 and Ektar 1000 films pose a challenge to
competitive films in Japan. Ektar 25 provides the sharpest image structure of
any color negative film.
"The performance of these films is very likely to give Kodak gains in
market share among photographers who are determined to be the best," Whitmore
said.
Ektar films will go on the market in Japan in early November.
Kodak Japan also announced today that it will change its name to Eastman
Kodak (Japan) Ltd., effective Jan. 1, 1989. This new name reflects the
current role of the company, namely that of Eastman Kodak Company's Japanese
Region headquarters.
Kodak Japan, formed in 1977 as a wholly-owned subsidiary of Eastman Kodak
Company, was initially engaged in marketing and procurement activities. Since
1984, however, it has assumed the role of Kodak's Japanese Region
headquarters, and today its 200 employees coordinate regional business
activities, as well as research and development, in Japan.
Among Kodak's holdings in Japan are: Eastman Japan Ltd., which exports,
imports and sells chemical and plastic materials; Kodak Far East Purchasing
Company Incorporated - Japan Branch, which procures products and materials in
the Far East area; and K.K. Kodak Information Systems, which imports, sells
and services information system products.
Kodak holds 51 percent share in both Kodak Nagase K.K. and Kodak
Imagica K.K. The former imports and sells photographic and imaging products
with Nagase & Co.: the latter has photofinishing operations in conjunction
with Imagica of Japan.
#
I-88-33
12/16/1991 09:48 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.04
Name of Publication: ASAHI SHIMBUN
Date of Issue: September 3, 1987
TRANSFORMATION OF "KODAK OF PHOTOGRAPHY"
STRENGTHENS SECTOR OF INFORMATION-RELATED BUSINESS
R & D CENTER IN YOKOHAMA
DOES NOT HANDLE FILM
Kodak Japan revealed on Sept. 2 that its R & D Center which is
under construction in Yokohama will function as the development base
for making business-information systems a pivotal product line in
addition to the traditional photographic film in the stretegy for
the Japanese market.
Its parent company, Eastman Kodak Company, is currently
strengthening information-related business worldwide, and has been
conducting a New Kodak campaign since March this year at a cost of
about ¥7.5billion. Kodak Japan's policy is that at the R & D Center,
whose construction will be completed in August next year, the
research and development of data processing systems, semiconductor
technology, etc. will be done, but the study of photographic film
will not be done on purpose, thus it leads the operation of the
strategy for transformation of "Kodak of photography."
The R & D Center will have a 4-storied building with a basement,
with a total floor space of about 17,500m², whose construction was
started in June this year at a site of about 17,000m². The
investment amount is expected to be about ¥10billion and the number
of research staff about 150. This center is Eastman Kodak Company's
sixth laboratory, following those in the U.S., France, England,
West Germany, and Australia.
- 1 -
12/16/1991 09:49 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.05
What Kodak Japan plans to hastily develop at this center for
the time being is the Japanese version of KIMS system which Eastman
Kodak Company put on sale this year. The system, using optical disk
and microfilm connected to a computer, stores data in the forms of
letters, pictures, and graphs, which can be retrieved freely. It
has become the main product among Kodak's business information
equipments.
For this purpose the company scouted young researchers from
other enterprises, and recently decided on the introduction of a
super computer VP-50 from Fujitsu, Ltd. for development
simulation and other uses.
Kodak Japan does not disclose business results. According to
the consolidated statement of earnings by Eastman Kodak Company, its
total sales in 1986 was about US$11. 5billion, of which sales of
photographic products including film accounts for 40%, products for
industry use such as information systems and medical equipments 30%,
chemical business 20%, and others 10%. Also Kodak Japan's pivotal
product line is the photographic products.
For this reason there is a strong image that "Kodak is a
photographic company." However, Eastman Kodak Company has been
conducting a "New Vision of Kodak" campaign since March this year in
order to make the sector of information systems for industry use one
of the two main product lines side by side with photographic products
in the future. Kodak Japan places the construction of the R & D
Center among one of the measures for strengthening the sector of
products for business use with a focus on information systems, and
make it a strategic base in Japan, the world's second largest
market.
- 2
12/16/1991 09:49 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.06
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12/16/1991 09:50 FROM .KODAK-EDITORIAL SERVICE
716 724 9829 P.07
Ground broken for Kodak Japan's
new Research & Development Center
A recent Shinto ceremony in Yokohama
Kodak Nagase K.K.; Howell Hammond,
the city's manager, Kohoku New Town
heralded the beginning of construction
vice-president and director, Research
construction: Mr. S. Nonomura, of the
of the new Kodak Japan Research and
and Development, Japanese Region;
Kohoku Housing and Urban
Development Center
Tsutomu Kimura, president, K.K. Kodak
Development Public Corp., and
The ground-breaking was held in
Information Systems; Mr. S. Eguchi,
representatives of a number of
Kohoku New Town in Yokohama
Yokohama's director, Urban
companies which have facilities in
The project, announced in the fall of
Development Planning; Mr. M. Watari,
Kohoku New Town.
1985, calls for construction of a five-
story laboratory building with a total
floor space of about 190,000 square feet
117,550 square meters).
The center, designed by Takenaka
Komuten Co., Ltd., and scheduled to
open next August (1988), will be staffed
by about 150 scientists and engineers,
who will work on research and
development activities in electronics
and information-processing systems.
The land was acquired in 1986.
At the Shinto ceremony, Al Sieg, EK
vice-president, general manager of the
Japanese Region and president of
Kodak Japan K.K., wielded the symbolic
spade, and was joined by Mr. T.
Takenaka, president of Takenaka
Komuten.
At a reception following the
ceremony, Sieg said, "This is indeed a
momentous occasion for us. This is the
beginning of a new phase of Kodak
activities in Japan. Our initial
development efforts (in Yokohama) will
concentrate on business products and
advanced integrated systems for the
Al Sieg uses symbolic spade
Japanese market. Our research activities
are expected to focus on selected areas
of semi-conductors both materials
and devices."
The ceremony was attended by about
70 persons, including Ed Przybylowicz,
EK senior vice-president and director of
Research; Takuya Sawada, president,
hist
and gestures in the Shinto ceremony
konweeks
Bes
rrespondence to:
International
Kodak
Aodak Company
street
saw with 14630
Features of the new Kodak Japan Research
situs at "
and Development Center portrayed on a
tab Park
model provided by Takenaka Komuten, the
12/16/1991 09:51 FROM S.KODAK-EDITORIAL SERVICE
NEW YORK TIMES
716 724 9829 P.08
When the Corporate Lab Goes to Japan
bithdalded by new technologies and, seon
American officials who seek greater
By DAVID & SANGER
after, the products that contain them.
access to the Japaness market are
Until just a few years ago, what most
thus reluctant to urge companies to
Toxyo
American companies called "research"
Have those jobs to Japan - where
ADAAKI NANAI says tt took him's
in Japan was often the talloring of exist.
they will be performed by-Japanese.
S
while 16 realize that research and
ing products to It the Japanese market
When Commerce Secretary Robert
replacing & 120-velt transformer with a
A Mosbachet came here with a dele-
development work in Rechester,
N.Y., where Estman Kodak Company
100-vell one, moving a steering wheel or.
gation or American companies trying
has tts beadquarters, 15 very different
backaging products with instructions in
to break into the Japanese market, he
from research and development in Yoko-
Japanese. That is still the approach of
said It was far too early to think about
hame, the Japanese industrial center
most American companies, although it is
research and development. "First
where be opened Kodak's new research
one that increasingly looks shortsighted
you have to come 10 the market, then
laboratory swo years age,
"It presumes that the best technology is
maybe manufacture here," be said.
In Rechaeter, Kodak's up researchers
in the United States," says Nebue Mill, &
"After that, you turn to the question
rely heavily $0 tochnicians up perform
senior executive of L.B.M. Japan. "Often- of research."
much of the laboratory work, freeing sck
times, that is not the case"
To the Japanese, Mr. Mosbacher's
entists and engineers to think about the
This year. Mr. MII must prove his point.
formula is backward The most rue-
results. When the basic research is done,
I.B.M. is moving much of its research and
cessful Japanese companies operat-
the work is turned over to & development
development for smaller systems, is-
ing in America, they contend, long
team responsible for translating ft into
pecially laptop computers and their
ago sent researchers and designers
new Kedak products. Except tn rate
there, near the market where they
components, to Japan. The move has
cases, Kodak's American researchers de
provoked resentment in the compa-
would be competing. That process is
not visa customers. "Rochester 16 discov-
ny's laboratories in the United States,
accelerating: Honds and Toyote now
cry-driven." said Mr. Nanal. & veteran of.
where the laptop machines, including
design an increasing number of their
the Citizen Watch Company and several.
cars in the United States: $onv. Hita-
a series of models introduced a
other Japanese enterprises. of Kodak's,
month ago, were developed. But so
chi and Fujitsu are moving more and
more electronics research to North
American ways. "Visiting customers.
many of the components come from
doesn't help you make discoveries."
Japan that I.B.M. decided the re-
America and Europe:
So the first thing Mr. Nanal and Tom
search should be based here as well
Conducting research and develop-
Kelly, $ veteran Kodak executive who is
The first product. a notebook comput-
ment in Japan is not easy. Japanese
head of research for the company's Japan
or that weight five and 8 half pounds,
a are not cheap; land for a
operation. do when Japanese researchers
Center can be expensive. The lan-
came out last month. 11 is now avail-
come back from orientation trips to Roch-
able in Japan. but BOX yet in the
guage barrier is a problem. though a
ester is to sit them down, ask them how
United States.
large number of Japanese research-
thry Miked America and sell them to forget
I.B.M.'s new approach to not wide-
are read English well and othen stud-
much of what they saw.
spread For years. advances in auto-
led in the United States. The biggest
"They all como back wanting techni-
mobile technology. everything from
challenge is breaking into the univer-
cians, and we tell them. Absolutely not.'
officiens low-emission engines to
sity networks, where LOP companies
The essence of research in Japan is to put
automotive electronics, have come
compete for young engineers. When
your best people in the laboratory. where
from Japan. Yet neither the Big
Dow Chemical opened its new center
they can see the unexpected firsthend. We
Three auta makers nor the major
(a) rural Kanagawa Prefecture, It
want them visiting customers all the time.
American stealmakers have a major
solved the problem by huring Itaru
so they can are what the market needs."
research and development effort USF-
Mila, a prominent and recently Ft-
derway here. The list goes on.
tired professor at the University of
A Singular Experiment
"The people who make decisions
Tokyo. as its first research director.
about whare to locate R.A D. centers
Finding researchers outside the
Mr. Nanal is trying an experiment in
university networks is less difficult.
grew up in an ore when the Japanese
Yokohama that is still rare among Ameri-
were knocking off cameras." said
"What you discover is that there are
can companies: to conduct serious 10-
John P. Stern, who name the Tokyo
B lot of very creative Japanese scien-
engreh MA Japan, Japanese-style, and then
office of the United States Electronics
tists, men and women, who are not
transfer the method back to the United
Association, a trade group. "Dut giv-
really interested in working for a
an both the importance of the Japa-
Japanese company." said Don Shaw,
States.
Among others trying the same expert-
nase customer and Japan's increas-
who arrived recently to direct Texas
Instruments' new research center in
EXPIRE are large companies like Internal
ing dominance in so many technol-
tional Business Machinez Howlett-Pack-
agies, the antonishing thing to that
Tsukube, Japan's science city. T.L.
are and Texas Instruments, and smaller
more American companies do not see
has & research and development
once tike the Dow Corning Corporation
the necessity of doing Rs D. to Ja.
project for the 16-megabit computer
and Applied Materials Inc. It is # path
pen."
memory chip underway with Mitachi
fraught with friction - mostly between
The company also expects to conduct
the established laboratories in the United
basic research in several arms.
States and the here and true-
A Controversial Option
trazion over high expenses and competi-
Without question, companies By,
1/7
sice for talent, which often is gobbled up
establishing research and develop-
by Japanese competitors.
ment centers in Japan is politically
But the converts contend that in many
controversial Research and develop
COPY
technologies the center of gravity has
ment involves some of the most RX.
moved across the Pacific, that not being
pensive and sophisticated work that
here is a mear-certain formula for being
goas into any company's products.
AVAILABLE
PAGE
6,
12/16/1991 09:52 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.09
Kodak executives said their 18b to
long said are the secret weapon of
flects A desire 9 keep up with Japa-
Japaneez competitors. Applied ac-
name innovations. "We spent a tot of
quired land in Narita, near Tokyo's
time focused on other things," said
international airport. Just a few
Albert L Sieg. who recently returned
months age, the company invited
to the United States after long service
Japanese clients to a dedication of an
expanded technology center, com-
as president of Eastman Kodak Ja-
plete with a Shinto ritual to break
pan, "and we let competitors get
open vate of sake.
shead in some critical areas."
"Wishout success ta the Japanese
One of those was electronic photog.
market," Tetsue Iwasaki, the head of
raphy. in the mid-1980's, Kodak be-
the company's Japanese subsidiary,
came concerned about Japanese-led
sold the visitors, "we cannot hope to
competition to electronic-imaging
be successful globally."
technology: indeed, with the enon-
What makes the Applied Mater-
mous popularity the hand-hald video
tals's Narita lab stand out is that It
camera, the technology has made sa-
Tious inreads against film. Research-
conducts research and development
Japanese-style: short up basic re-
are at Sony. Toshiba, Misachi and
other Japanese companies believe
search and long 00 development
Rather than search for broak.
the opportunities to replace film in
other areas will also expand as elec-
throughs, company engineers spend
thost of their days tweaking the
tronic images become as crisp as
equipment, making incremental
these on film.
progress to solve specific problems.
"You can't be @ Lone Ranger type
Aggressive Research
here, said Mr. Morgan. "You can't
Mr. Nansi has hired 100 research-
come here , 10th insuead of listen.
ors and is moving the laboratory into
The Japanese Swill take well to that.
electronic-imaging technology. The
Oh they will lister to you politely and
research includes work 00 gelltum
take THAT hur they was: pay atten-
arsenide semiconductors, a promis-
name 10 Issults that in some
ing but expensive technology that
und wechnology. they
could prove superior to allicon chips
ar. she milovate.
for converting light images into digi-
1'm Bi many .reas, Japan is far
tal computer code. Kodak's work in
rom INDOVATIVE One of the tricks of
this area - on a chip known as a
the lane-Palific high-tech game 18 to
charged-couple device, or C.C.D. - is
determine seactly what to move here
still centered in Rochester, 8 sore
and what 10 keep in the United States.
point with the Yokohoma research-
The Intel Corporation is one of the
ers, since mest of the world's C.C.D.'s
most successful American coraps-
are developed and produced in Japan.
nice in Japan, yet k has steadfastly
"Since OUP lab is so small and Roch-
refused to build a menufacturing tm-
ester is 30 large, they always have
eility here. Research in micro-
bigger power than we do," said Mr.
processors, on area where Japan has
Nanai. "Naturally, there is always
hardly excelled, is still done at Intel
conflict about what they should do
beadquarters in California.
and what we should da"
18 is not just large companies like
Penetrating Networks
Kodak that are cetting up laborato-
"We are giving thought to more
riss. Applied Materials of Senta
research here, but the big question is
Clars, Calif., which supplies equip-
how do you get Inside the best univer-
ment to process the atticon waters
stries, said William Howe, who
that become chips, decided years age
heads Intel Japan. "Like everything
k needed a Japanese :ab. Through the
else here, n is all a matter of relation-
80's, Japanese companies had cloud;
ships."
grown to dominate the industry AP-
But is will take more the one or
plied Materials dec "as that the way
two dosen foreign laboratories here
to cultivate Japan's 1 alserron-
to create critical mess for American
tos companies was to streat: some of
companies in Japan Hardly a month
a plants to Japan, where angileers
goes by without 6 Japanese company
from NEC and Pujitsu could from in
announcing a new design center or
new-product development. It was a
laboratory the North, America or Ru
big commitment for s relatively
rope. Even in a new age of technologi-
small company.
cal arrogence in Japan, most compa-
When he first rented $ small office
Wes believe they must took abroad
in Japan, James Morgan, the compa-
for sobitions to some problems. It
my's chairman, said he stayed awake
aserts only 8 matter of time before
American industry reaches the same
2/7
at night wondering where be would
come up with the money. Later, take
ennelusion and sends more research-
ing advantage of the then-low Interest
are to live and work in Japan
rates that American concerns have
20
3814
12/16/1991 09:52 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.10
Kodak Hedges With a Hybrid
K
ODAK'S Japanese research ish-
date via a light-sensitive chip known
orstory reflects the company's
as a charged-couple device, or C.C.D.,
hedged bet on the future of
Japan's electronics makers are pour-
electronic photography. and particu-
this billions of dollars into the technol-
larly on its Photo CD system, a hy-
egy. They are unfased. It seems, by
bris technology of film and electronic
the mild response to Sony's Mavica
Imaging the company will begin to
and other electronic cameras. The
market next year. The idea is to cap-
companies have an extra incentive to
ture 8 picture on film. digitize it with
make It work: High-quality electron-
a scanner and store n on a compact
tc Imaging is critical to Japan's strat-
disk. With a disk drive, the user can
egy for making high-definition selevi-
display the picture on a television
sion 1 success. Kodak, protecting its
screen. manipulate " on a computer,
Tranchise. maintains film is still the
merge it with documents or print it
best way to collect images.
out on a digital color printer.
This fall Kodak will bring out R
Digital images lack the sharpness
high-performan scenner that can
and richness of a conventions) color
read paper documents into comput-
print. But Kodak and Japanese com-
are and store them electronically -
panies believe the gap is narrowing.
faithfully reproducing color images.
"We think the crossover will come
The scenner 15 being designed and
around 1995," said a Sony researcher.
built entirely in Japan. "It was 8
"From then on, it may be impossible
question of time to market." said
to tell if a picture was gathered elec.
Tom Kelly. head of RA D. for Kodak
tronically or on film."
Japan. "There is an enormous tech.
The Photo CD was developed in
nological infrastructure here, mostly
Rochester, but much of the most Inno-
in the electronics companies, that will
vative work is in Tokyo. Building on
enable us to move this into production
their success with video cameras,
much faster than we could in the
which convert images into electronic
United States."
3/7
21
4 f14
12/16/1991 09:53 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.11
A Peur Rate
Of Exchange
NE of the least discussed
O
85 ade imbalances be-
Iween Japan and the
United
State
ventually
prove LO be the most damag.
ing: America's defice of young
researchers going to Tokys.
in 1958, the last year for
which data were collected, 3a.
pan sent more than 52,000 set-
entists to study and work in the
United States in return. the
United $13189 cent only 4,468.
American researchers seem
reluctant to & to Japan in part
because of the legendary diffi-
culues of learning Japanese
and the cost of living But no-
searchers who have worked in
Japan and returned often say
there are deeper forces at
play: American scientists wor-
ry ther time in Japan could de-
rall them from the fast track.
"Every time 1 come here. 1
find " IS a bit painful when 1 no
turn home." said Monica M.
Strause. a cognitive scientist
who is finishing up a research
stint at the Japanese Govern-
ment's Electrotechnica Lab-
oratory. Ms. Streuss argues
that American corporations
don't make real use of Ameri-
cans with broad contacts in Ja.
pan: "If the U.S. wants a long-
term industrial relationship
with Japan, 11 needs to develop
« corps of people who can work
here. but who have acceptance
at home."
That may be beginning to
happen. M.I.T.S program of
training engineers in Japanese
and dispatching them to Japan
for year-long stints IS academ-
to and corporate laboratories is
expanding. as are similar pro-
grams at a handful of other unit
versities. "What we learned is
that we have to spend as much
time teaching American com-
panies new to make use of
these people when they get
back home as we do preparing
the students to & to Japan,"
Richard Samuels, the head of
4/7
M.I.T.'S Japan program. said
recently. "Sometimes, camps-
sisa don't have a clue."
22
50.14
- MM on her TM - Vwa Tem
Badacki Nanal and Tem Kelly. who guide research and development for Eastman Kodak in Japan.
5/7
12/16/1991 09:54 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.13
Agency Frence-Prote
U.S. Commerce Secretary Robert A. Mosbacher meeting in
Japan with Prime Minister Toshiki Kaifu.
$2,224
United
Serve
4,400
Another Kind of Trade Gap
1,487
Britzle
The number of Japanese
1,438
scientists warking in each
country in 1988
4,773
Promo
The number of adentiste
from each country working
is Aman in 1998
6/7
January of international Tame and injury
2x
70/14
Kodak's Photo CD system uses film and electronic imaging.
12/16/1991 09:55 FROM S. KODAK-EDITORIAL SERVICE
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20
BORN AGAIN
IN JAPAN
A $1 billion success story
By
Patrick J. Killen
The press reception was held on the top floor of Tokyo's
score in 1900 when another Fuji blimp, en route from Los
Kasumigaseki Building. Japan's first skyscraper.
Angeles to New York City for a celebration, detoured and
"We had all the drapes shut," recalls one of the sponsors. "We
buzzed the Kodak headquarters building in Rochester, N.Y.
were connected by walk talkie. We had some speeches. then
The Kodak airship was an important symbol of Kodak
we heard it was right outside.
presence and rising fortunes in Japan, a country the company
That was in August 1986; and officials said the airship with
had all but written off after World War II asia distant land with
the yellow emblem was designed to let people know that Kodak,
high tariffs and strange customs.
the world largest film maker. was back in Japan: face-to face
Though its products were first sold in Japan in 1889. Kodak
with customers and distributors after an absence of more than 40
chose not to restore its wholly owned company after the war.
years
Instead. it decided to sell through a series of Japanese
Later the Kodak blimp flew past the Fuji Film headquarters,
distributors. Unknown to Kodak at least one of the distributors
causing great consternation and sucking of wind at the board
also represented a Japanese competitor - not the best way to do
meeting Since Kodak had the only airship licensed to fly in
business
Japan, the Fuji directors hurriedly ordered their own airship in
Part of Kodak's reluctance to participate directly in the
Europe deflated and flown to Tokyo., A few weekslater it was
Japanese market was the protection afforded domestic film
airborne with a German crew
makers by the postwar government. A series of protective duties
For nearly three years. the yellow Kodak airship and the green
on foreign imports were invoked, with some as high as 40 percent
Fuji blimp contested the skies over Japan. Kodak officials
lasting into the 1970s.
figured Fuji response doubled the interest in their high-flying
By 1980. the situation was becoming disastrous with some
advertising scheme.
Kodak products all but disappearing in what had become the
A Kodak official acknowledged Fuji may have evened the
worlds second largest film market: We were dealing through
12/16/1991 09:55 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.16
We opened the curtains and there it was,
the Kodak blimp It was a very impressive
sight; and it was a secret up until that time.
1
Extended Page 16. 1
12/16/1991 09:56 FROM .KODAK-EDITORIAL SERVICE
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22
The Japan IJ
a distributor into a customer base so diverse WE were losing touch
with the marketplace." one Kodak official said.
In Rochester, corporate officials decided to ignore the horror
stories about what the Japanese do to foreign businessmen and
ordered a study.
Albert L. Sieg, the director of corporate strategic planning.
was put to work drawing up the strategy for Kodak's re-entry
into the Japanese market.
Once the study was done, the board offered the job to Sieg,
who was shocked and surprised. "I thought it was a heck of &
challenge," Sieg said. "There's not many times in corporate life
that you get to build a whole brand new business."
Years later, Sieg was to add with a smile, "Parenthetically, if
I knew when I was developing the Japan strategy that I also was
going to be the one to implement it, I would have been more
careful."
AI Sieg, 53 at the time, seemed an unlikely choice. A native
of Chicago. Sieg graduated from the University of Illinois with
a degree in chemistry and went to work in Rochester at Kodak
as an analytical chemist. After years of laboratory work and a
Robert L. Smith is Eastman Kodak Japan's new president
Ph.D. at the University of Rochester, he moved into
and general manager. taking over April 1. A Kansan, Smith
management, holding such in-house jobs as supervisor of paper
has had extensive service in Latin America.
sensitizing emulsion product control before moving into
strategic planning in 1981.
"I had never lived outside the U.S. before and 1 was not an
'international' person." recalls Sieg. After convincing his
stunned family it was a good idea, the Sieges came to Japan and,
he said, "We were astounded by the cost of living here."
"So we developed a product,
Administratively Kodak took Japan out of its Triple-A (Asia,
Africa and Australia) division and set up a separate Japan region.
and the original intention was
Sieg brought out a small management team in 1984 and set to
that it was only for the
work.
There were a few problems.
Japanese market. But
"It took us almost two years to negotiate with our distributors
everybody liked it and it ended
to convince them it was in their best interest to sell their business
back to us. That took an enormous amount of time and effort."
up as our universal product,
Sieg said.
which in now Kodacolor Gold."
Kodak set up 8 series of companies and joint ventures. By
1986, it had 2,000 employees and had developed a recruiting
program with close ties to Japanese universities. A modern
research and development centre. Kodak's largest outside the
United States, was opened in Yokohama in 1988 at a cost of 10
billion yen.
saturation that this market likes." said Sieg.
In May 1990, Kodak pulled together its nine companies and
In plainer language. pictures of many Japanese were coming
moved into the plush. new Gotenyama Hills Mori Building in
out with an unnatural yellow hue.
Tokyo's Shinagawa district, taking over the fifth through the
A new sharper film. Ektar 100. is currently produced just for
12th floors.
Japan, and is aimed at what Sieg calls "the high burners," the
One of the early problems was that most young Japanese didn't
advanced amateur cameramen who know about film and
know Kodak from a keyak.
cameras. "Probably one-third of the Japanese fall into that
So Kodak launched a massive recognition campaign. Huge
category," said Sieg.
neon Kodak signs went up on the Ginza and in Shinjuku in
All this effort and money has re-established Kodak in Japan.
Tokyo, and in other major cities-Osaka, Sapporo and Fukuoka.
Film makers are notoriously tight-lipped about their share of the
The yellow airship took off. Kodak sponsored an all-star soccer
amateur film market, but there is general agreement that Fuji
tournament and junior tennis. and was cities. There were
Film is the big leader with Konica, another Japanese company,
massive advertising layouts and store promotions. Kodak was
and Kodak far behind. Toshihide Yoda, an analyst with UBS
listed on the Tokyo Stock Exchange.
Phillips & Drew, who follows the market, said Fuji, with a
One problem later turned out to be 8 big plus.
superior sales and laboratory network has a solid 70 percent
"The products we were bringing over here were world class,
market share, followed by Konica, with about 17 percent, and
but they were not really meeting the express needs of the
Kodak with 10 percent.
Japanese customers," Sieg said. "So one of the first things we
Competition, said Sieg. is fierce and intense, and there is a
did was to modify and rebuild products to meet that need. which
lot more to Kodak than just small rolls of film
we did."
Those percentage figures, said Sieg, "have nothing to do with
things like motion pictures or X-ray film, or professional
Extended Page
17.
1
we aid.
"In most cases. they (the new products) ended up being
things like monum
(Kodak's) world product because the Japanese market is one of
photography because in some of those markets we're clearly
the most demanding in the world."
dominant." Kodak also makes disposable cameras for Japan. both
One prime example was Kodak's color film. "We discovered
that the film we were making didn't have the intense color
wide-angle and underwater. It markets chemicals and plastics.
12/16/1991 09:57 FROM S.KODAK-EDITORIAL SERVICE
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The Japan IJ
23
It is in the pharmaceutical business through its ownership of
advancement in the photographic industry was clearly in Japan.
Sterling Drug, Inc. Kodak is heavily involved in the commercial
In every sense, said economist James Abeggien, Japan is
and industrial use of imaging.
where Kodak's strategic future will be played out.
It makes information systems including the huge KIMS-the
Abegglen said Kodak has "changed from a bad example" of
Kodak Information Management System. which integrates data
corporate neglect "to a really impressive one" with its
from magnetic tape. microfilm and optical disks. Meiji Life
performance during the past seven years.
Insurance has a KIMS and so does Japan Telecom. It makes high
The president of the Asia Advisory Service K.K., Abegglen
speed copiers and has an agreement with professional film for
said Kodak offers convincing proof that foreign companies can
Japanese weddings where Sieg said it is most important that
establish themselves in Japan on a major scale and in a short
"dresses come out white-white and hair is black-black."
period of time.
One measure of success is that in 1989, Kodak's 100th
Besides Sieg, Abegglen credits Kodak's President Kay R.
anniversary of doing business in Japan, company sales amounted
Whitemore, as "personally leading the charge."
to about $1 billion, the only figure it boosts about publicly.
"I don't want to denigrate Al Sieg, but he had to have someone
Keiichi Murai, Eastman Kodak Japan deputy public relations
flying cover for him. That was Kay Whitmore." Abegglen said.
chief, can be prodded into saying it is more than that now, but
After seven years, Sieg, 60. packed up in April and returned
he will give no figures.
to Rochester as Kodak's Director of Strategic Resources.
Kodak officials argue that money is not the only reason Kodak
In a message to his staff, which had grown from 20 to 4,000.
decided to establish a presence in Japan. There was a need to
Sieg said Kodak is now "a force to be reckoned within the
compete head-to-head with Fuji Film, it's No. 1 global
Japanese market." "This experience," he said, "has shown me
challenger, on its home turf just as Fuji and Konica were doing
that building a business in Japan is not impossible, only difficult
in the United States. And the cutting edge of technical
and takes patience and commitment."
Sieg's replacement is Robert L. Smith, 51, a 30-year veteran
of Kodak who has served extensively abroad in Brazil, Argentina
and Mexico. He was Latin American region general manager in
the early 1980s.
A native of Parson, Kansas, Smith has a Bachelor's degree
from the University of Kansas and a Master's from the
Massachusetts Institute of Technology.
He was appointed assistant general manager of the Japan
region in October 1990, and assumed the post of general
manager and president of Eastman Kodak Japan April 1.
"Clearly there are many opportunities and challenges for our
company," Smith told staff members while taking over the new
assignment. "We have an important legacy of achievement
which we must strive to live up to."
Sieg called Smith "the right person" to lead Kodak's "next
phase of growth and development." JU
Albert L. Sieg, Easuman Kodak Japan's president for seven
years. He left in April to become Kodak's director of
strategic resource in Rochester, N.Y.
Kodak's 10 billion yen Research and Development Center in Yokohama.
Opened in 1988. more than 100 scientists and technical people work there.
Extended Page 18. 1
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TECHNOLOGY
PICKING JAPAN'S
RESEARCH BRAINS
At last U.S. companies are overcoming the "not invented here" syndrome and learning how to
tap Japan's vast technological resources-just as Japan has tapped America's. by Susan Moffat
o
NA CLEAR DAY, Tom Kelly can
see Mount Fuji from his lab. But
moox
the best thing about being in Ja-
pan, says the head of Eastman Ko-
dak's $70 million research center in
Yokohama, is viewing firsthand the world's
fastest-paced race in applied research-by
taking part in it. Kelly's mandate is to hire
Japan's most talented electronics and mate-
rials researchers and get them to discover
new technologies for Kodak products. Says
Kelly: "If you're serious about staying com-
petitive globally, you've got to be on the
ground here."
For years Japan has come to the U.S.,
bought or borrowed the best of America's
technology, and sold it back to the U.S. as
finished products. Japanese companies
have sent thousands of engineers to be
trained at American universities and set up
basic research labs on American turf: Com-
puter giant NEC located its new $25 mil-
lion lab in Princeton and hired top
scientists from nearby Bell Labs to help
lead it. Kobe Steel and Fujitsu have re-
search centers in Silicon Valley. Sixteen
Japanese companies have endowed chairs
at MIT, at about $2 million a shot.
So far, the technology flow has been pret-
ty much one way. In 1989, U.S. companies
took in $2.5 billion selling technology to the
Japanese but spent only $500 million to buy
technology from Japan. Now, though, more
and more American high-tech companies
are setting up laboratories in Japan, which
could start reversing the imbalance. These
U.S. corporations are aiming to become as
aggressive at picking up and commercializ-
ing Japanese ideas as the Japanese have
been at acquiring U.S. technology.
This year Texas Instruments is opening a
basic research laboratory in Japan, as Dow
Corning, IBM, Du Pont, and W.R. Grace
have already done. At least ten others, in-
cluding Kodak, Dow Chemical, Pfizer, and
It's raining R&D: Texas Instruments Japan director Norman Neureiter in Tokyo's electronics district
Digital Equipment, are doing applied re-
50 FORTUNE MARCH 25, 1991
12/16/1991 09:59 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 20
search in their own Japanese labs. They are
American companies
hiring leading Japanese scientists away from
have not been as quick as
companies like Hitachi, Toshiba, and Nis-
they might have been to
BRUCE OSBOEN
san, from elite universities, and from labs
seize this opportunity to
run by the Ministry of International Trade
acquire new technology.
and Industry (MITI). The Americans offer
Many seem not to re-
competitive salaries-a senior scientist at
member that the U.S. was
age 45 can easily earn $138,000 a year-
once the world's best
and, more beguiling, greater intellectual
commercializer of im-
freedom and the chance to plug into global
ported inventions. Henry
research networks.
Ford reverse-engineered
U.S. companies are also funding research
German car motors; the
by prominent professors and luring top Jap-
British invented jet cn-
anese students with scholarships. American
gines. "We've been a
outfits are being invited to join Japanese
leader and teacher so long
government-funded research consor-
that we've forgotten how
tiums-which could help them keep an eye
to be a student," says
In the picture: Hiroyuki Ishibashi and Michael Mintz of Dow Chemical
on their competitors. Meanwhile, a small
Michael Mintz at Dow
group of young American scientists and en-
Chemical International. He heads a team of
recognize. In the late 1980s American com-
gineers are learning technical Japanese and
nine whose sole job is to collect ideas and
panies licensed or otherwise bought more
penetrating the heart of corporate R&D
develop relationships with Japanese univer-
technology from Japan than from any other
with internships in labs of companies like
sities, companies, and government agencies.
country except Britain-evidence that the
NEC, Hitachi, and Toshiba, which are cager
Mintz's fellow American research directors
reluctance of Japanese companies to sell
to build long-term relationships with Ameri-
in Japan almost unanimously agree that the
their expertise is not absolute. In 1990 the
can scientists and universities.
greatest obstacle to their efforts isn't the
U.S. spent $491 million to license technol-
Japanese but the "not invented here" syn-
ogy from Japan, up from $89 million eight
NTIL RECENTLY, most Ameri-
drome that has come to blind Americans to
U
years earlier.
can companies didn't have a clue
developments outside their own labs.
What Japanese corporations remain re-
how to get at Japanese technology.
Charles Wallace, who represents the Na-
luctant to sell, Americans are creating from
Though Japan's universities have
tional Science Foundation in Tokyo, says his
scratch on Japanese soil. While Japanese
long been open, most cutting-edge research
biggest disappointment is
goes on in corporate laboratories traditional-
that it's still hard to get
ly closed to outsiders. Most scientists' papers
American scientists to do
WHERE THE
TSUKUBA
are published in Japanese and thus inaccessi-
research in Japan, even
TEXAS INSTRUMENTS
ble to foreign readers, who generally have
though the Japanese gov-
U.S. R&D IS
Semiconductors
UPJOHN
not bothered to learn the fiendishly difficult
ernment will often foot
Pharmoceuticols
language; translation is time-consuming and
the bill. In a recent year
INTEL
expensive. Another barrier: Japanese tech-
America sent to Japan
Semiconductor design
nology tends not to be up for sale as much as
only about 1,400 re-
DU PONT
CHITOSE
Agricultural chamicals
American expertise is. Unlike a lot of Amer-
scarchers; Japan sent
MEDTRONIC
MONSANTO
ican companies, the Japanese are often re-
nearly 8,500 to the U.S.
Medical devices
Agricultural chemicals
luctant to license what they know to improve
The gap is even greater
their profits in the short term. They consider
TAHARA
NARITA
among college and gradu-
AMERICAN CYANAMID
APPLIED MATERIALS
it far more valuable as a long-term asset.
ate students: An army of
Agricultural chemicals
Semiconductor manufacturing
None of this was a problem when the
nearly 30,000 of them
equipment
world looked on Japan as a mere technology
from Japan invaded the
NAGOYA
TOKYO
copycat. But now Japan originates many of
U.S. last year, VS. a mea-
PFIZER
Pharmaceuticals
IBM
the most advanced applications in such
gcr battalion of 1,180
Computers
fields as high-definition television, liquid-
Americans who studied
HEWLETT-PACKARD
crystal displays, semiconductors, biotech-
at Japanese universities.
Photonics, intregrated circuits
ATSUGI
nology, so-called new materials-such as
Only 7% of students en-
W.R. GRACE
YOKOHAMA
exotic formulations of gallium arsenide for
rolled in foreign-language
New materials
DOW CORNING
semiconductors-and, overwhelmingly, the
classes at Northwestern
New moterials
GOTEMBA
technology of manufacturing. The Japanese
University near Chicago
IBM
government has given a top priority to im-
DOW CHEMICAL
Computers
are studying Japanese,
Chemicals
and over 40% drop out
OSAKA
BRISTOL-MYERS SQUIBB
proving the country's basic research capa-
Phormoceuticals
bilities, with a new openness to foreigners-
after the first year.
PROCTER & GAMBLE
DU PONT
and a high level of scientific achievement-
Soaps, detergents,
Japan is already a rich-
CORNING
New materials
hair-care products
that takes getting used to.
New materials
er source of ideas for the
DIGITAL EQUIPMENT
Computers
REPORTER ASSOCIATE Joshua Mendes
U.S. than many people
EASTMAN KODAK
Electronics
MARCH 25, 1991 FORTUNE 51
12/16/1991 10:00 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.21
TECHNOLOGY
THE LOPSIDED TRAFFIC ACROSS THE PACIFIC
THE U.S. EXPORTS
WHILE JAPAN SENDS THE
MOSTLY IDEAS
U.S. MORE PRODUCTS-
A GROWING TRADE GAP
TO JAPAN
AND STUDENTS
IN HIGH-TECH IDEAS
Royalties and licensing fees
$2.5
(in billions)
$2.0
$1.5
PAID TO U.S.
BY JAPAN
$1.0
PAID TO JAPAN
$0.5
BY U.S.
0
'82
'83
84
'85
'86
'87
'88
'89
0000
AND HIGH-TECH PRODUCTS
$30
(in billions)
$25
$10
$20
U.S. IMPORTS
FROM JAPAN
$15
U.S. EXPORTS
$10
TO JAPAN
Japan picks America's brains in two ways: by borrowing or buying technology from U.S. companies
$5
and by sending a substantial contingent of young Japanese to study at American universities-
0
many of them in science and engineering. New American R&D tabs and student internship
80
81
82
'83
'84
85
'86
'87
'88
programs in Japan are starting to redress the longstanding Imbalance in Intellectual trade.
companies often hesitate to hawk their tech-
thing American companies hope to learn is
electronics bazaar of Tokyo's Akihabara
nology, talented Japanese individuals are ea-
not the intellectual foundation of new tech-
district and you will find "intelligent" wash-
ger to offer their creative abilities and
nologies but new ways to make them into
ing machines that use semiconductors to
connections to American companies. Engi-
products. By being on the ground, Ameri-
measure the dirt in clothes and $1,400 toi-
neers are one of the most mobile parts of the
cans see firsthand that the Japanese labs
let-bidets that incorporate integrated cir-
Japanese work force. Publishing companies
next door are turning research into products
cuits to spray you with water at just the right
produce two-inch-thick directories every
faster and more cheaply than their competi-
temperature. There are copy machines the
week listing engineering job opportuni-
tors in the U.S. Americans also notice that
size of instant cameras, boom boxes with
ties-including those at U.S. labs in Japan.
Japanese research is far more market driven
built-in word processors, computers no big-
American companies setting up research
than their own. Japanese companies have to
ger than a Popsicle that can read 3,500
operations there hope to hear of new tech-
pay for 98% of their research from their own
handwritten Chinese characters. On crowd-
nologies long before they surface in the U.S.
revenues, while their U.S. counterparts de-
ed commuter trains, tiny flat-screen TVs
technical and general press, which carries
pend on Washington to fund fully a third of
help make the journey bearable.
only a tiny fraction of Japanese discover-
theirs. Japanese companies usually devote
ies-and then often months late. "Many
two-thirds of R&D funds to improving
MERICAN RESEARCH direc-
technological developments important to
manufacturing processes and only one-third
A
tors in Tokyo exude enthusiasm.
my company never get reported by the
to developing products. In the U.S., the pro-
Says Tom Kelly of Kodak: "I'm liv-
American press, even though they're COV-
portions are reversed-often with unhappy
ing in a rich technological stew."
ered in Japanese publications," says Jim
results for product quality.
Kodak's experience is worth examining in
Martin, Rockwell International's technol-
One of the biggest advantages of doing
some detail. For a company accustomed to
ogy watcher in Tokyo.
research in Japan, American businessmen
ruling U.S. film markets from its laborato-
Japanese companies now devote as much
say, is simply living where reminders of
ries in Rochester, New York, it was not easy
funding to basic research as their American
breakneck innovation bombard you nonstop
to shift gears and look overseas for new de-
rivals. But perhaps the most important
from every shop window. Walk around the
velopments. But in the 1980s it became
12/16/1991 10:01 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.22
clear that the future of Ko-
nificant barriers to gather-
doing to ours-we developed our own prod-
dak's erstwhile stronghold
ing technological informa-
ucts inspired by their ideas."
-manipulating images-
tion. "It's actually casier to
lay as much in electronics
collect it here than in the
IBM. Twenty-one years ago, long before
"We've been
as in film. Says Kelly: "The
U.S.," he observes. Japa-
most foreign companies thought Japan had
world had changed, and WC
a teacher
nese companies, he notes,
much to offer scientifically, Big Blue set up a
announce new technologi-
research center in Tokyo. Today the 240 ba-
had a difficult psychologi-
cal adjustment to make.
cal developments in both
sic researchers there regularly exchange
so long that
the popular press and the
ideas with other IBM labs around the world.
We went from not having
to look outside to a situa-
we've forgot-
trade press faster and more
"Japan is ahead of the U.S. in many areas of
tion where the technologi-
consistently than American
hardware and component manufacturing,
ten how to
companies do. His staffers
such as opto-electronics, liquid-crystal dis-
cal building blocks were TK)
longer under our control."
pick up a constant stream of
plays, and some types of semiconductors,"
tidbits when they're out
notes Norihisa Suzuki, a former associate
Howell Hammond, head
be a student.
of Kodak research in Japan
drinking or playing tennis
professor at Tokyo University who heads the
with friends from university
lab. "There is lots of technology we can pick
in the early 1980s, literally
stuck pins in a map of Japan
days, or from previous em-
up or develop and bring to IBM labs around
to plan his attack. The pins,
ployers, customers, and
the world." IBM hires 30% of its research
which marked the locations of leading cor-
even competitors. Compared with the rela-
scientists in Japan in mid-career from univer-
tive isolation of Rochester, Tokyo's concen-
sities or other companies. That helps Big
porate electronics labs, revealed a high con-
tration of industry keeps competitors keenly
Blue maintain good communications where
centration of them in a swath of Tokyo
suburbs. To increase Kodak's chances of hir-
aware of one another's activities. In this
it counts.
ing away Japanese scientists, and to jump
environment, information flows like electric
IBM's Tokyo lab is doing basic research in
into the thick of Japan's face-to-face infor-
current.
image-recognition systems, multiprocessor
mation network, Hammond recommended
A sampling of the Japanese R&D ven-
computing, and computer applications. The
locating there.
tures of five other U.S. companies:
sister product development lab near Yokoha-
ma has contributed a number of products to
In 1987 the company broke ground for a
180,000-square-foot research center and be-
DOW CORNING. Keeping up with interna-
IBM's global lineup over the years. The lat-
gan the equally important task of cultivating
tional developments is nothing new to this
est, developed jointly with IBM's Almaden
joint venture, formed in 1943 to exploit sili-
Research Center in California: a 31/2-inch-
leading scientists to help with recruiting.
Kodak used all the tactics Japanese firms
cone, a European invention. The company,
diameter magneto-optical disk that can store
deploy in the U.S. It began financing re-
still owned by its two U.S. parents, estab-
the enormous amounts of data required for
search by university scientists and providing
lished a presence in Japan three decades
movie-like images and sound.
continued
scholarships for outstanding young Japa-
ago. Silicone is an advanced material
nese engineers, some of whom later joined
derived from sand and used in every-
Kodak's Tom Kelly at research center in Yokohama
the company. It hired stars like Uichi Itoh,
thing from airplane fuel systems to
an internationally known materials scientist
medical equipment to breast im-
then at MITI's electrotechnical lab. Itoh at-
plants. Secing Japan race ahead in re-
SHIGED KOGURE
tracted experienced colleagues from To-
search on a broad variety of new
shiba, Hitachi, and other leading Japanese
materials, the company opened a $7
companies, and recruited young graduates
million basic research lab in Yokoha-
of first-rate universities like the Tokyo Insti-
ma last October. Says Gordon
tute of Technology. Says Kelly: "We are be-
Fearon, technical director of Dow
coming full members of the Japanese
Corning Japan: "We saw silicone be-
community, with access to the kind of infor-
ing targeted as a key new material by
mation our competitors have."
MITI and decided we'd better be
Full-scale operation, with a staff of 70, be-
part of the research going on here."
gan in October 1988. Today Japan is the cen-
In the early 1970s the company beat
ter of Kodak's worldwide efforts in
its American competition to commer-
molecular beam epitaxy, a method of grow-
cializing silicone ceramics, a heat- and
ing crystals for making gallium arsenide
wear-resistant new material useful in
chips. Also, for one of Kodak's Japanese cus-
the aerospace, automobile, and clec-
tomers the lab developed a system for send-
tronics industries. The material was
ing fax images to multiple locations directly
invented by a Japanese. Fearon heard
from a computer; it is now being sold world-
of it early on. He was introduced to its
wide. "We probably wouldn't have devel-
inventor by another Japanese scientist
oped that if we weren't here," says Kelly.
who had won a prize for silicone re-
Kodak has expanded its staff to 90 and add-
search from Dow Corning. Says
ed a $10 million wing to the lab.
Fearon: "We did to the Japanese tech-
Kelly says he hasn't encountered any sig-
nology what they've been so fond of
12/16/1991 10:02 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.23
TECHNOLOGY
TEXAS INSTRUMENTS. Dallas-
search facility, focuses on drugs for
based TI has found that technology
transfers from its Japanese manu-
YMYZNA INSERVE
central nervous system disorders,
cardiovascular diseases, and meta-
facturing plants and design centers
bolic imbalances.
to its U.S. operations have brought
major benefits. The company has
MEDTRONIC. As a rapidly aging
been designing and manufacturing
society, Japan offers not only a fast-
semiconductors in Japan for about
growing market for medical prod-
20 years, and has 5,000 employees
ucts but plenty of subjects for
there. Later this year TI will open
research studies. Medtronic, which
an ambitious fundamental research
had $836 million in sales worldwide
lab that will eventually be home to
last year, is a Minneapolis manufac-
200 scientists at Tsukuba, 90 min-
turer of pacemakers and other medi-
utes from Tokyo, which is fast be-
cal products. The company decided
coming one of the world's biggest
several years ago that it needed both
concentrations of government and
R&D and production capabilities in
private laboratories.
Japan. So this June it will open a
Norman Neureiter, a director of
five-acre technology center in the
Texas Instruments Japan, says TI's
wide open spaces of the northern is-
Japanese design labs develop prod-
land of Hokkaido, where the climate
ucts that would not get made in the
and wooded landscape make Min-
U.S. "Our technology is driven for-
nesotans feel at home.
ward by Japanese market demands,"
Dow Coming Japan's Gordon Fearon with silicone products
The goal of the research center
he says. "We decided to work on
will be to pick up developments in
chips for consumer electronics here because
we get by starting early to design HDTV
new materials and precision instruments that
there's hardly any market left in the U.S., and
chips here will give us a leg up on whatever
could improve products worldwide. The
making those chips will spin off benefits for
standard is chosen for the U.S."
company is considering funding research by
many of our other products." For example,
Neurciter regularly brings over young
professors at Hokkaido universities. Med-
the company has licensed high-definition-
engineers from the U.S. to see how things
tronic already uses many Japanese compo-
television technology from public broadcast-
are done in TI's Japanese plants, which
nents in its pacemakers. By manufacturing in
er NHK so it can make chips for HDTV sets.
have provided valuable advances in manu-
Japan, Medtronic, which now has 35% of the
which are already being marketed in Japan
facturing techniques to the company's fac-
market there, will be producing the first all-
on a limited basis. The U.S. has yet to decide
tories worldwide. The Americans are
Japanese pacemaker. The company expects
on broadcast standards for HDTV, which
surprised to learn that many of their Japa-
the device's made-in-Japan cachet to help
will not hit the American market until
nese peers work as factory technicians for
sell it to Japanese doctors.
around 1995. Says Neureiter: "The expertise
as long as five years before doing any
semiconductor design. Says Neureiter:
P
ERHAPS the most surprising
IBM's Suzuki (right) with colleague Avi Mukherjee
"When it's time for them to design chips,
thing Americans discover in Japan
PORSER THE
you can be sure they are easy to manufac-
is an abundance of perfectly public
ture. They know what it's like to make the
information that never goes be-
things." He thinks the experience Ameri-
yond the country's shores. Some Japanese
can engineers gain working in Japan
companies clearly prefer it that way. Jim
makes them more productive once they re-
Martin of Rockwell recalls negotiating with
turn to Texas.
the Japanese to get them to pay royalties on
an advanced semiconductor processing
UPJOHN. Japan is making major strides in
technology patented by his company. At one
pharmaceuticals and medical equipment,
meeting, a major Japanese electronics outfit
with Japanese companies considered lead-
assured Rockwell that it had no intention of
ers in certain types of antibiotics. They have
using the technology in its products and
also developed some promising anticancer
therefore had no reason to pay royalties.
drugs. Hoping to tap into the strength of re-
The Rockwell negotiators calmly pulled
search there, Upjohn has invested $100 mil-
out an article from a Japanese newspaper in
lion in a 300,000-square-foot center where
which the Japanese firm boasted about us-
160 researchers are led by Toshihiko Ko-
ing the new technology. The Japanese side
bayashi, formerly head of R&D at giant
went pale, retreated to a separate room for
Mitsubishi Pharmaceutical. Kobayashi trav-
an hour, and came back prepared to settle.
els to Upjohn headquarters in Kalamazoo,
By a simple database search of newspaper
Michigan, every other month and helps set
articles in Japan, Rockwell discovered more
the company's global agenda for R&D. The
than 15 cases of patent infringement on the
Tsukuba lab, Upjohn's biggest overseas re.
same technology. Experts say many U.S.
12/16/1991 10:03 FROM S.KODAK-EDITORIAL SERVICE
716 724 9829 P.24
Kodek in Japan
1889
Kodak products sold for the first time in Japan
1920
George Eastman visited Japan
1922
Nagase & Co. started importing Eastman motion picture
tilm
1927
Cine Kodak Service, Japan Inc. formed
(Changed name to Kodak Japan, Ltd. in 1930. Charter
abandoned in 1957.)
1954
Kusuda Business Machines appointed distributor of
Recordak Corporation
1960
Nagase & Co. appointed distributor
1963
Kodak (Far East) Ltd. Tokyo Branch opened
1975
Japanese Relations formed in Rochester
1977
Kodak Japen K.K. formed
1984
Japanese Region formed, with headquarters in Tokyo
1985
Eastman Japan Ltd. formed
Kodak Far East Purchasing Co., Inc. formed
Kodak Japan Technicel Center opened
K.K. Kodak Information Systems formed
1986
Kodak Nagase K.K. formed
Eastman Kodak Company listed at Tokyo Stock Exchange
1987
Kodak Imagica K.K. formed
1988
Eastman Kodak (Japan) R&D Center opened
Kodak Japan Industries Ltd. formed
1989
Several companies changed names:
Kodak Japan K.K. Eastman Kodak (Japan) Ltd.
Kodak Nagase K.K.
Kodak Japan Ltd.
Eastman Japan K.K. Eastman Chemical Japan Ltd.
1990
Most of the group companies relocate their headquarter
operations to the Gotenyama Mori Building, Tokyo
1991
Eastman Kodak Asia-pacific Ltd. formed
THEMES FOR ASIA TRIP
Overall
America is an Asia-Pacific partner for the long haul
(America will not retreat into isolationism/protectionism)
Economically
Politically
--
Security
As outlined in the President's Asia Society speech, there
are six keys to America's long-term vision for the Asia
Pacific. The trip will highlight each of these:
I.
PROGRESSIVE TRADE LIBERALIZATION
Aggressively pursue Uruguay Round Settlement (if still
pending) (Japan, Korea, Australia)
Promote APEC (All countries)
Push access for American products and services (Japan,
Korea)
Encourage American investment in the region (Singapore,
Japan, Korea)
II. SECURITY COOPERATION
Maintain pressure on DPRK nuclear program. Stress need for
united action against DPRK nuclear program (all countries;
encourage Singapore to get ASEAN action during upcoming
ASEAN Summit)
U.S. will restructure, but remain engaged
:
Continued air and naval presence at current levels in
Japan for the foreseeable future
--
Korea presence dependent on progress for lasting peace
on the peninsula; however, envision long-term air
presence for regional deterrence into the future
--
Singapore agreement as model for access arrangements of
the future in other parts of the region
III. A SHARED COMMITMENT TO DEMOCRACY AND HUMAN RIGHTS
Continue pressure on ROK (last visit by Pres. Bush made a
difference)
Lay out position on Vietnam (Singapore)
Highlight China if necessary
2
IV EDUCATIONAL AND SCIENTIFIC INNOVATION
:
Show link between domestic agenda and foreign policy
-- Highlight S&T progress (all countries)
-- Examine educational differences that we can learn from
(Japan, Korea)
V
RESPECT FOR THE ENVIRONMENT
-- Note progress made and areas for improvement (Japan, Korea)
:
Announce SE Asia initiative (if ready)
VI
APPRECIATION OF DISTINCT CULTURAL HERITAGES
:
Announce various cultural exchange initiatives (all
countries)
ECONOMIC THEMES FOR THE PRESIDENT'S TRIP TO ASIA
Both the U.S. and Asia benefit from free trade and open markets:
Our economic relationship is not a zero-sum game for either
partner.
The American economy and American jobs increasingly depend
on free trade and open markets.
-
In the United States, nearly half (49%) of our GNP
growth between 1985 and 1990 was attributable to
exports.
-
In 1991, U.S. will export close to $700 billion worth
of merchandise and services.
-
Record 7.2 million jobs were supported directly and
indirectly by U.S. merchandise exports alone in 1990.
-
More than 19,000 jobs are supported per billion
dollars of U.S. exports.
Asia's stake in the trading system is greater than ours.
The export strength and economic growth of Asian economies
will continue to be dependent upon open international
markets for goods, services, and investment.
-
Asian economies are relatively more dependent than the
U.S. economy on exports and imports.
-
In 1990, exports amounted to 32% of GNP in Korea and
15% of GNP in Japan; by comparison, U.S. figure is 10%.
If the open trading system cannot be preserved and expanded
in the Uruguay Round, Asia's prosperity could be jeopardized
by stagnant world trade.
Asia is increasingly important to the U.S. economy:
The United States is a Pacific power, with vital economic,
as well as political, interests in the region.
Asia is an important and growing market for U.S. exports and
a source of U.S. job creation.
-
Japan (#2), Korea (#6), and Taiwan (#9) were among top
10 markets for U.S. exports in 1990.
-
In 1990, U.S. manufacturers sold $115 billion of goods
in the Asia-Pacific region (29% of total U.S. exports);
by comparison, $113 billion in goods were sold in
Western Europe.
- 2 -
-
Exports to Japan and the four Asian NIE's alone support
an estimated 1.7 million U.S. jobs.
Trade with Asia accounts for large and growing proportion of
total U.S. trade.
-
In 1980, U.S.-Asia trade accounted for 24% of total
U.S. trade (imports and exports). By 1990, Asia
accounted for 34% of total trade.
Asia is also a large consumer of U.S. services, including
financial services, an area in which the United States has
special expertise.
-
In 1990, U.S. sold $22.9 billion in services to Japan
and Australia alone.
The westward shift of U.S. population, immigration patterns,
and increased cultural diversity in the United States point
to ever closer economic relations with Asia and the Pacific.
-
The U.S. population is increasingly concentrated in the
Western states (21.2% of total U.S. population in
1990).
-
A large and increasing share of U.S. GNP is produced in
the Western states.
-
Asians represent growing share of U.S. population (6.9
million in 1990 or 2.8% of total VS. 1.6% in 1980) and
growing share of U.S. immigration.
Asia needs our exports:
Asia's demand for imports -- our exports -- will increase as
Asian economies grow wealthier.
Asian consumers need access to foreign goods and services if
they are to raise their standard of living and enjoy the
fruits of their labors.
-
Japanese Prime Minister Miyazawa, for example, recently
stated that Japan should become a "lifestyle
superpower". This will benefit our economy by
increasing opportunities for U.S. exporters.
Asian countries have cooperated with the U.S.:
The U.S. -Asia relationship helps reinforce global
cooperation for the benefit of citizens of all nations.
Several Asian nations helped shoulder the economic burden of
- 3 -
the international effort to counter Iraq's aggression.
-
$10.4 billion was committed by Japan ($10.0 billion)
and Korea ($355 million) to offset U.S. military costs
of Operation Desert Storm.
-
$2.8 billion in economic assistance was committed by
Australia ($14 million), Japan ($2.7 billion), and
Korea ($115 million) to ease impact of Gulf Crisis on
the frontline states in the Middle East (Egupt, Turkey,
and Jordan).
In the G-7 and Economic Summit fora, Japan has helped foster
sustainable world growth with low inflation.
Japan has also supported U.S. initiatives to resolve the
international debt problems of the developing nations. For
example:
-
It pledged $500 million for the Multilateral Investment
Fund (MIF) for Latin America, one third of total MIF
funding.
-
Japan contributed almost $500 million to international
efforts to clear the arrears owed by Panama, Nicaragua,
and Panama to the international financial institutions.
O
Asian countries have helped the U.S. in efforts to
strengthen market forces in Eastern Europe and in developing
countries. This will help open up these economies for U.S.
trade and investment.
Treasury Department
December 10, 1991
KOREA
FINANCIAL SERVICES
The Korean financial system is antiquated, over-regulated,
and ill-suited to the needs of Korea's dynamic economy.
U.S. banks and securities firms face numerous barriers to
entering and operating in the Korean market.
In addition, elimination of Korea's pervasive controls over
interest rates, credit allocation, and capital flows is
essential if U.S. financial institutions are to enjoy long-
term competitiveness in Korea, and U.S. businesses are to
find adequate funding sources.
The Treasury Department and Korean Ministry of Finance have
made some progress in bilateral talks in addressing both
specific national treatment issues and broader financial
liberalization. However, much work remains to be done.
The USG has also sought Korean cooperation in bringing about
a strong financial services agreement in the Uruguay Round;
Korea's support thus far has been very disappointing.
Our specific objectives for the President's trip include:
-
A public statement by the ROKG of its commitment to
financial liberalization, including support for a
strong Uruguay Round financial services agreement.
-
Issuance of a comprehensive blueprint for financial
market liberalization, with a clear timetable for
implementation.
-
Implementation of a commitment last spring to ease
restrictions on deferred payment terms for imports by
the end of 1991.
Treasury Department
December 10, 1991
JAPAN
ECONOMIC THEMES
The U.S. and Japan have the single most important
bilateral economic relationship in the world.
-
With the world's two largest economies, their
actions impact many other nations, as well.
Despite disputes over trade issues, Japan has
cooperated closely with the U.S. (e.g. in the Economic
Summit and G-7 framework) to foster sustainable world
growth with low inflation, and has been very supportive
of a number of U.S. initiatives, including resolving
the debt crisis in developing countries.
However, a number of contentious economic issues in the
area of trade, financial services, and investment
plague the bilateral relationship, despite continuous
bilateral consultations.
Uruguay Round:
Agriculture is the key to compromise; Japanese need to
show leadership and contribute to a successful
conclusion.
Also need liberalization in financial services area.
Japan's External Surpluses:
We are concerned about Japan's rising current account
surplus
-
Surplus is expected to rise from $36 billion in 1990 to
$68 billion in 1991, according to the IMF). This
imbalance can disturb financial markets and feed
protectionism.
Although the U.S. trade deficit with Japan fell from a
peak of $57 billion in 1987 to about $42 billion last
year, it is beginning to increase again and still
accounted for two-thirds of the overall U.S. trade
deficit through September, 1991.
This highlights need for Japanese to maintain economic
growth and open markets.
Export Dependency and Bilateral Trade:
Although both the U.S. and Japan have major stakes in
preserving the open trading system, Japan is somewhat
more dependent on exports than the U.S.
- 2 -
-
Japan's exports of goods and services accounted
for 15 percent of GNP in 1990. For the U.S., the
figure was 10 percent.
-
The U.S. is Japan's most important market,
accounting for almost 32% of Japan's exports and
almost 22% of Japan's imports in 1990.
-
Japan is the U.S.' second most important market,
accounting for 12% of U.S. exports and 18% of U.S.
imports in 1990.
-
In finance-related service transactions (royalties
and license fees, financial services and
insurance) the U.S. has a surplus with Japan.
U.S. receipts amounted to $4.0 billion in 1990,
compared to payments of $1.4 billion.
Foreign Investment:
The U.S. market is far more open to foreign direct
investment than Japan's. This has fed Congressional
and popular concern in the U.S.
Cumulative direct investment inflows into the U.S. during
the period 1981-90 amounted to $355 billion ($80 billion
from Japan alone), compared with only $6 billion in the same
ten year period into Japan from all sources.
-
During the period 1981-90, cumulative foreign
direct investment in the U.S. represented about
5.7% of total U.S. fixed investment. In Japan,
the equivalent number was 0.1%, a difference of
more than 50:1.
Exchange Rate:
O
Yen/dollar rate has been quite stable since October
1991 G-7 Ministers meeting.
U.S. believes rates in G-7 countries are consistent
with balance of payments adjustment needs and
underlying economic fundamentals.
Japanese Financial Markets:
O
Despite U.S. efforts to open up Japan's financial
markets, Japanese banks are far more important in the
U.S. than U.S. banks in Japan. Japanese banks in the
U.S. hold 11% of U.S. banking assets; U.S. banks in
Japan hold less than 1% of Japanese bank assets.
- 3 -
We have been negotiating with the Japanese since 1984
to liberalize financial markets. Significant progess
has been achieved, but more needs to be done.
O
Recent financial scandals are symptomatic of the continued
lack of transparency and competition in the Japanese market.
Japan needs to take steps to reform its system and restore
international confidence.
Structural Impediments Initiative (SII)
SII represents an important initiative to reduce
impediments to competition and adjustment of external
imbalances. SII success can help to head off
protectionism.
-
For example, U.S. has urged Japan to: increase
public infrastructure investment to improve
economic well being; reduce monopolistic effects
of keiretsu business practices; and open up
distribution system to imports,
Some progress has been achieved, but it is essential
that we re-energize the SII process by introducing new
commitments on both sides.
Treasury Department
December 10, 1991
AUSTRALIA
ECONOMIC THEMES
Australia has been an invaluable negotiating partner in the
Uruguay Round, especially on agricultural issues like the
CAP.
Facing its fourth year of declining agricultural income,
Australia has pressed the U.S. on farm issues:
-
It has complained about U.S. subsidized wheat sales, is
unhappy with having to negotiate with the U.S. a
voluntary restraint agreement on beef, and is concerned
about a 34% cut in its sugar import quota due to
increased U.S. production.
Australia's financial markets have been relatively closed to
foreign entry. However, under reforms recommended to
Parliament in November, foreign banks would be allowed
easier entry and operation.
Treasury Department
December 10, 1991
SINGAPORE
FINANCIAL SERVICES
Singapore is an important offshore financial center, and
maintains a relatively open market for foreign firms.
However, U.S. firms face discrimination in the significantly
smaller domestic market.
The U.S. seeks Singapore's support for a strong financial
services agreement in the Uruguay Round. At a minimum, the
U.S. would like to see Singapore stop blocking progress and
play a more constructive leadership role.
-
The lack of support from Singapore and the other ASEAN
countries for a strong financial services agreement in
the Uruguay Round has been very disappointing.
In the bilateral financial services negotiations, the U.S.
seeks a commitment from Singapore for a level local playing
field in both the banking and securities sectors.
Treasury Department
December 10, 1991
SII - U.S. Commitments
Issue:
GOJ officials have criticized the USG for not following
through on as many of its commitments as the GOJ has done. By
their count, Japan has completed 80 percent of its commitments,
while the USG has completed 20 percent, at best.
Suggested Talking Points:
-- What matters most in SII is the significance of the
undertakings, not the quantity.
-- The U.S. deserves credit for making substantial progress on
its commitments, which, in many respects, have been more
difficult politically than those that Japan has undertaken.
-- There is an asymmetry to U.S. and Japanese undertakings. In
many cases, Japan is being asked to open up its economy and
improve the lifestyle of its people, while the U.S. is
trying to cut public expenditures to reduce its budget
deficit and stave off protectionist pressure to close the
U.S. market.
-- The GOJ may have passed a larger number of pieces of SII
legislation than in the U.S., but the U.S. has resisted a
larger number of protectionist and budget-busting bills than
Japan.
--
In both countries, we are trying to deal with ingrained
structural problems in a way which will have a lasting
effect, even if it takes some time for their effects to be
felt.
-- The two most important efforts by the United States include:
o
undertaking major budget reforms, which are holding the
line on deficit spending, even in a difficult recession
year;
-
This package included tax increases that were
undertaken at great political cost, and an even
tighter rein on discretionary spending.
-
We haven't seen a sustained reduction in the
deficit numbers yet; nor has Japan in its trade
numbers. The U.S. budget deficit will come down,
though, and the reduction will be lasting.
-
In comparison, the parallel Japanese commitment to
increase public infrastructure spending benefits
numerous Japanese constituencies and is
politically popular.
2
vigorously defending open investment policy;
-
Administration has maintained its open investment
policy in the face of numerous protectionist
proposals and growing mood of isolationism.
-
In contrast, Japan's commitments are aimed at
opening its markets, with benefits for the
consumer.
[May wish to note Presidential Statement
strongly reaffirming open investment policy,
if released.]
-- In addition, U.S. has taken a number of other measures:
O
intensified export promotion efforts, with a particular
focus on Japan;
o
embarked on an ambitious program to improve workforce
education and training;
-
In April 1991, President Bush outlined strategy to
achieve national education goals, called "America
2000," which involves major reforms to primary and
secondary education system.
o
increased Federal support for research and development
efforts;
-- The FY 1992 budget proposed to allocate about $76
billion for R&D in 1992, an increase of over $8
billion, or 13 percent over 1991 levels. This is
the highest
level ever.
and
o
continued to work toward strengthening incentives for
private saving and long-term investment (e.g.,
reduction of capital gains tax; enhanced IRAs; Family
Savings Accounts), despite strong political resistance.
-- U.S. intends to intensify these efforts.
12/9/91
Treasury