SPEAKERS       CONTENTS       INSERTS    
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49–009 CC
1998
RELATING TO THE IMPORTANCE OF JAPANESE-AMERICAN RELATIONS AND THE URGENT NEED FOR JAPAN TO MORE EFFECTIVELY ADDRESS ITS ECONOMIC AND FINANCIAL PROBLEMS; COMMEMORATING 100 YEARS OF RELATIONS BETWEEN THE PEOPLE OF THE UNITED STATES AND THE PEOPLE OF THE PHILIPPINES

MARKUP

BEFORE THE

SUBCOMMITTEE ON
ASIA AND THE PACIFIC

OF THE

COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

SECOND SESSION

ON

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H. RES. 392 AND H. RES. 404

MAY 14, 1998

Printed for the use of the Committee on International Relations

COMMITTEE ON INTERNATIONAL RELATIONS
BENJAMIN A. GILMAN, New York, Chairman
WILLIAM GOODLING, Pennsylvania
JAMES A. LEACH, Iowa
HENRY J. HYDE, Illinois
DOUG BEREUTER, Nebraska
CHRISTOPHER SMITH, New Jersey
DAN BURTON, Indiana
ELTON GALLEGLY, California
ILEANA ROS-LEHTINEN, Florida
CASS BALLENGER, North Carolina
DANA ROHRABACHER, California
DONALD A. MANZULLO, Illinois
EDWARD R. ROYCE, California
PETER T. KING, New York
JAY KIM, California
STEVEN J. CHABOT, Ohio
MARSHALL ''MARK'' SANFORD, South Carolina
MATT SALMON, Arizona
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AMO HOUGHTON, New York
TOM CAMPBELL, California
JON FOX, Pennsylvania
LINDSEY O. GRAHAM, South Carolina
JOHN McHUGH, New York
ROY BLUNT, Missouri
KEVIN BRADY, Texas
LEE HAMILTON, Indiana
SAM GEJDENSON, Connecticut
TOM LANTOS, California
HOWARD BERMAN, California
GARY ACKERMAN, New York
ENI F.H. FALEOMAVAEGA, American Samoa
MATTHEW G. MARTINEZ, California
DONALD M. PAYNE, New Jersey
ROBERT ANDREWS, New Jersey
ROBERT MENENDEZ, New Jersey
SHERROD BROWN, Ohio
CYNTHIA A. McKINNEY, Georgia
ALCEE L. HASTINGS, Florida
PAT DANNER, Missouri
EARL HILLIARD, Alabama
BRAD SHERMAN, California
ROBERT WEXLER, Florida
STEVE ROTHMAN, New Jersey
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BOB CLEMENT, Tennessee
BILL LUTHER, Minnesota
JIM DAVIS, Florida
LOIS CAPPS, California
RICHARD J. GARON, Chief of Staff
MICHAEL H. VAN DUSEN, Democratic Chief of Staff

Subcommittee on Asia and the Pacific
DOUG BEREUTER, Nebraska, Chairman
JAMES A. LEACH, Iowa
DANA ROHRABACHER, California
PETER T. KING, New York
JAY KIM, California
MATT SALMON, Arizona
JON FOX, Pennsylvania
JOHN M. McHUGH, New York
DONALD A. MANZULLO, Illinois
EDWARD R. ROYCE, California
HOWARD L. BERMAN, California
ENI F.H. FALEOMAVAEGA, American Samoa
ROBERT E. ANDREWS, New Jersey
SHERROD BROWN, Ohio
MATTHEW G. MARTINEZ, California
ALCEE L. HASTINGS, Florida
LOIS CAPPS, California
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ROBERT WEXLER, Florida
MIKE ENNIS, Subcommittee Staff Director
RICHARD KESSLER, Democratic Professional Staff Member
DAN MARTZ, Counsel
HEIDI L. HENNIG, Staff Associate
C O N T E N T S

    H. Res. 392
    H. Res. 404
Additional material submitted for the record:
Statement on H. Res. 404 submitted to the record by Hon. Doug Bereuter, a Representative in Congress from Nebraska
MARKUP ON H. RES. 392, RELATING TO THE IMPORTANCE OF JAPANESE-AMERICAN RELATIONS AND THE URGENT NEED FOR JAPAN TO MORE EFFECTIVELY ADDRESS ITS ECONOMIC AND FINANCIAL PROBLEMS AND OPEN ITS MARKETS BY ELIMINATING INFORMAL BARRIERS TO TRADE AND INVESTMENT; AND H. RES. 404, COMMEMORATING 100 YEARS OF RELATIONS BETWEEN THE PEOPLE OF THE UNITED STATES AND THE PEOPLE OF THE PHILIPPINES

THURSDAY, MAY 14, 1998
House of Representatives,
Subcommittee on Asia and the Pacific,
Committee on International Relations,
Washington, DC.
    The Subcommittee met, pursuant to notice, at 2 p.m. in room 2200, Rayburn House Office Building, Hon. Doug Bereuter (chairman of the Subcommittee) presiding.
    Mr. BEREUTER. The Subcommittee meets in open session to consider two legislative resolutions. I will not proceed to the point where we are actually marking it up as long as the Ranking Minority Member is not here, but I think I might start and make a statement in his absence so that we can expedite the proceedings of the markup.
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    The two items of legislation are House Resolution 392 concerning Japan's role in the Asian financial crisis, and House Resolution 404, commemorating 100 years of relations between the people of the United States and the people of the Philippines.
    The first order of business will be H. Res. 392, which the clerk will report.
    The CLERK. H. Res. 392, relating to the importance of Japanese-American relations and the urgent need for Japan to more effectively address its economic and financial problems and open its markets——
    Mr. BEREUTER. Without objection, further reading of the resolution will be dispensed with, printed in the record in full and open for amendment.
    [H. Res. 392 appears in the appendix.]
    Mr. BEREUTER. I can see we are about to have a vote, but I will proceed.
    The resolution was introduced on March 24, 1998, by this Member, Mr. Berman, and is now cosponsored by 18 other Members of the House, including Chairman Gilman, Mr. Royce, and Mr. Faleomavaega of this Subcommittee. The resolution was referred to the Subcommittee on Asia and the Pacific, and I have a few comments about it.
    The world is closely watching Japan to determine if that country's leaders can steer the world's second leading economy clear of recession. The implications of their actions or inaction are enormous for Japan itself, for the regional and global economy, and for the United States. If Japan's leaders choose the right path, they can help ensure that the Asian financial crisis is a short-lasted speed bump on the road to further economic liberalization and democratization in Asia. But if they choose the wrong path, they have the potential to prolong the crisis and perhaps even contribute to a global economic slowdown that will have a significant impact on the United States as well as the Asian region.
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    Some people suggest that the United States should not publicly instruct Japan how to mend its economy, but that is not possible, I think, given the global impact of Japan's decisions. They are the second largest economy, of course. Several years ago, G–7 leaders lectured the United States about its enormous fiscal deficits, and although we didn't like it, we have responded appropriately. Similarly, Japan's leaders do not have to like the nearly unanimous advice they are receiving from the Group of Seven and the United States, but they must respond accordingly if they are to serve their own purposes.
    H. Res. 392 first commends Japan for its significant generosity toward the troubled economies of the Asia-Pacific region by providing second-line credits, loans, insurance and grants. However, H. Res. 392 also calls upon Japan to help pull the region out of the crisis by doing those things necessary to stimulate its own economy and thereby absorb more imports from Indonesia, Korea and Thailand.
    I am told, parenthetically, that in the last year, Japan has reduced its imports by approximately $55 billion, a tremendous amount.
    H. Res. 392 outlines some of those actions, and they include: deregulation of the economy; elimination of nontariff trade barriers; honoring bilateral trade agreements; reforming the financial system; and stimulating the economy through permanent tax cuts.
    In Mr. Berman's absence, I would turn to my colleague from California, Mr. Royce, to see if he has any comments regarding this resolution. You are recognized.
    Mr. ROYCE. Thank you, Mr. Chairman. I thank you for introducing this resolution. Given the continuing financial crisis in Asia, I think this sends a strong signal to Japan, one of our closest allies, that fundamental economic reforms are really needed to rejuvenate the Japanese economy. There is no doubt that faster deregulation, greater transparency and a reduction on import barriers will work to spur the Japanese economy and further strengthen the alliance between our two nations.
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    I would just like to thank you, Mr. Chairman, for introducing this Japan resolution.
    Mr. BEREUTER. Thank you very much, Mr. Royce. I had mentioned that the previous weekend I had an opportunity to attend a meeting of very high-level businesspeople from Japan visiting the United States, in the first of what they expect to be annual meetings with their American counterparts. Plus, there were a couple of Parliamentarians, Japanese Diet members, some economists, and myself.
    While we talked about this resolution—and they had seen it in advance—there was no criticism of the resolution, at least at that meeting or privately to me from the Japanese business leaders. In fact, there was a lot of support for direct and, more important, permanent tax cuts for individual Japanese as a way of stimulating the economy.
    We understand the significance and their concern about deficits. We have had that problem ourselves. We have had it far too long until perhaps the opportunity to have a surplus this year. But given the fact that the Japanese people seem to be putting a larger share of their savings, already a very large amount before this economic recession, into postal savings as opposed to commercial banks with other kinds of investments, and given the report that the largest consumer item is home safe these days, in terms of growth, perhaps a direct individual tax cut that is permanent as opposed to a temporary one would have a salutary effect on their consumption patterns and be good for Japan and be good for their East and Southeast Asia neighbors.
    Mr. Royce, thank you for your attendance here at the beginning of this session.
    Mr. Berman has indicated that he finds it acceptable that we proceed without him. He is the cosponsor.
    Is there any further discussion or amendments?
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    Mr. ROYCE. I would move the bill, Mr. Chairman.
    Mr. BEREUTER. Thank you very much, Mr. Royce. If there is no further discussion and on your motion, as many as are in favor will say aye.
    As many as are opposed will say no.
    The motion is agreed to. Without objection, the staff is authorized to make technical, grammatical and conforming changes to the text just agreed to.
    Mr. BEREUTER. The second order of business is H. Res. 404. The clerk will read the resolution.
    The CLERK. H. Res. 404, commemorating 100 years of relations between the people of the United States and the people of the Philippines.
    Mr. BEREUTER. Without objection, further reading of the resolution will be dispensed with, printed in the record in full and open for amendment.
    [H. Res. 404 appears in the appendix.]
    Mr. BEREUTER. I have a number of comments regarding this resolution introduced by Chairman Gilman. It has many cosponsors, including our colleague Mr. Royce. I would ask unanimous consent that my entire statement explaining the resolution be made a part of the record. Hearing no objection, that will be the case. I strongly endorse it.
    [Mr. Bereuter's statement appears in the appendix.]
    Mr. BEREUTER. I want to turn to Mr. Royce, who certainly has a great interest in this area and has many Filipino Americans in his district and in the region around his district. I would turn to you for any comments you might like to make.
    Mr. ROYCE. Thank you, Mr. Chairman. As a cosponsor of the resolution, I would just say that in commemorating 100 years of relations between the people of the United States and the people of the Philippines, this resolution celebrates the close ties that our two nations have worked hard to maintain. Through World War II, its role as a partner in regional stability and increased trade, the Philippines is a solid ally. This is an important resolution. I urge its passage. Thank you, Mr. Chairman.
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    Mr. BEREUTER. Thank you very much, Mr. Royce, for your support and for your encouragement on the offering of this resolution by Mr. Gilman. I join him as a cosponsor.
    I want to thank Mr. Berman for working with me and with Mr. Gilman on both resolutions. He is a cosponsor. We have had good input from Dr. Rick Kessler, Mr. Berman's staff member, in reaching this point as well.
    Seeing no one for further discussion, I would welcome a motion from the gentleman.
    Mr. ROYCE. I would move the bill, Mr. Chairman.
    Mr. BEREUTER. The motion is to proceed with the yeas and nays. As many as are in favor will say aye.
    Those opposed will say no.
    The motion is agreed to. The ayes do have it. Without objection, the staff is authorized to make technical, grammatical and conforming changes to the text just agreed to.
    I would make one further announcement. We expect to have a markup next Thursday at approximately this time of at least one resolution. Thank you. The Subcommittee's markup is adjourned.
    [Whereupon, at 2:15 p.m., the Subcommittee was adjourned.]

A P P E N D I X

    Insert "The Official Committee record contains additional material here."