Economic Report of the President 1994 - The American Presidency ...

greater access to the Japanese market, though. With more-openmarkets not only will American firms sell more but, because of theexchange-rate adjustments, many American firms will receive morefor what they sell. Moreover, Japanese consumers will benefit—forthe same reasons that American consumers benefit—from openingtrade: Both will have access to a greater variety of goods at lowerprices. Open markets are a win-win situation in which both sidesgain.The existence of such a large, technologically dynamic, and distinctiveeconomy as Japan poses special trade problems for theUnited States. Current U.S. policy centers around the UnitedStates-Japan Framework for a New Economic Partnership, announcedin July 1993. The Framework is the successor to the1985-86 Market Oriented Sector Selective (MOSS) talks and theSII talks already mentioned. The Framework document adopted atthe time of the 1993 Tokyo economic summit calls for macroeconomic,sectoral, and structural reforms and cooperation on globalissues of common interest such as the environment. In particular,Japan committed itself to "actively pursue the medium-runobjectives of promoting strong and sustainable domestic demandledgrowth...intended to achieve...a highly significant decrease inits current account surplus...." Japan also committed to "promotinga significant increase in global imports of goods and services." Forits part, the United States "will...actively pursue the medium-termobjectives of substantially reducing the fiscal deficit, promoting domesticsaving, and strengthening its international competitiveness."The sectoral and structural parts of the talks are organized intofive baskets: government procurement, regulatory reform and competitiveness,other major sectors (in the first instance, automobilesand auto parts), economic harmonization, and implementation ofexisting arrangements and measures. Topics under the governmentprocurement basket include Japanese procurement practices insuch sectors as computers, supercomputers, satellites, medical technology,and telecommunications, as well as overall government procurementpolicies in both countries. Regulatory issues include policiesand practices relating to financial services, insurance, competitionpolicy, retail and wholesale distribution, and U.S. exportcompetitiveness. Economic harmonization covers foreign direct investment,intellectual property rights, access to technology, andlong-term buyer-supplier relationships. The implementation basketis concerned with carrying out existing agreements between thetwo countries (including SII). The Framework agreement explicitlystates that the United States and Japan are committed to the multilateraltrading system and that "benefits under this Frameworkwill be on a Most Favored Nation basis."220