It is with great honor and respect that I come before you today, the first American President ever to address the Japanese Diet.

I have been in your country only 2 days. But speaking for my wife, Nancy, and myself, may I say you have more than made us feel at home. The warmth of your welcome has touched our hearts. In welcoming us, you pay tribute to the more than 230 million Americans whom I have the privilege to represent. From all of us -- all of them to you we reach out to say: The bonds of friendship which unite us are even greater than the ocean which divides us. Nichi-bei no yuho wa eien desu. [Japanese-American friendship is forever.]

It was a dozen years ago on an autumn day like this one that I first visited Japan, and today, as then, I feel energy, initiative, and industry surging through your country in a mighty current for progress. And just as before, I am struck by a unique gift of the Japanese people: You do not build your future at the expense of the grace and beauty of your past.

Harmony is a treasured hallmark of Japanese civilization, and this has always been pleasing to Americans. Harmony requires differences to be joined in pursuit of higher ideals, many of which we share. When former President Ulysses S. Grant visited here in 1878, he discovered Japan is a land of enchantment.

During his stay, he met with the Emperor, and their discussion turned to democracy, the pressing issue of the day. President Grant observed that governments are always more stable and nations more prosperous when they truly represent their people.

I am proud to help carry forward the century-old tradition, meeting first with your Emperor on my arrival and now meeting with you a great milestone in your history: the 100th session of the Diet under the modern Japanese Constitution. In 6 years you will celebrate your 100th anniversary of representative government in Japan, just as we will celebrate the birth of our own Congress. I bring you the best wishes and heartfelt greetings from your American counterparts, the Congress of the United States.

One cannot stand in this chamber without feeling a part of your proud history of nationhood and democracy, and the spirit of hope carrying the dreams of your free people. Of all the strengths we possess, of all the ties that bind us, I believe the greatest is our dedication to freedom. Japan and America stand at the forefront of the free nations and free economies in the world.

Yes, we are 5,000 miles apart; yes, we are distinctly different in customs, language, and tradition; and yes, we are often competitors in the world markets. But I believe the people represented by this proud parliament and by my own United States Congress are of one heart in their devotion to the principles of our free societies.

I'm talking about principles that begin with the sacred worth of human life; the cherished place of the family; the responsibility of parents and schools to be teachers of truth, tolerance, hard work, cooperation, and love; and the role of our major institutions -- government, industry, and labor -- to provide the opportunities and security -- opportunities and security free people need to build and leave behind a better world for their children and their children's children.

America and Japan are situated far apart, but we are united in our belief that freedom means dedication to the dignity, rights, and equality of man. Yukichi Fukuzawa, the great Meiji-era educator, said it for you: ``Heaven has made no man higher or no man lower than any other man.''

Our great American hero Abraham Lincoln put it in political perspective for us: ``No man is good enough to govern another man without that other's consent.'' We both value the right to have a government of our own choosing. We expect government to serve the people; we do not expect the people to serve government.

America and Japan speak with different tongues, but both converse, worship, and work with the language of freedom. We defend the right to voice our views, to speak words of dissent without being afraid, and to seek inner peace through communion with our God.

We believe in rewarding initiative, savings, and risk-taking. And we encourage those who set their sights on the farthest stars and chart new paths to progress through the winds and waters of commerce. Others censor and stifle their citizens. We trust in freedom to nurture the diversity and creativity that enriches us all. I like what your poet Basho said: ``Many kinds of plants and each one triumphant in its special blossoms.''

Finally, our freedom inspires no fear because it poses no threat. We intimidate no one, and we will not be intimidated by anyone. The United States and Japan do not build walls to keep our people in. We do not have armies of secret police to keep them quiet. We do not throw dissidents into so-called mental hospitals. And we would never coldbloodedly shoot a defenseless airliner out of the sky. We share your grief for that tragic and needless loss of innocent lives.

Our two countries are far from perfect. But in this imperfect and dangerous world, the United States and Japan represent the deepest aspirations of men and women everywhere -- to be free, to live in peace, and to create and renew the wealth of abundance and spiritual fulfillment.

I have come to Japan because we have an historic opportunity, indeed, an historic responsibility. We can become a powerful partnership for good, not just in our own countries, not just in the Pacific region but throughout the world. Distinguished ladies and gentlemen, my question is: Do we have the determination to meet the challenge of partnership and make it happen? My answer is without hesitation: Yes we do, and yes we will.

For much of our histories, our countries looked inward. Well, those times have passed. With our combined economies accounting for half the output of the free world, we cannot escape our global responsibilities. Our industries depend on the importation of energy and minerals from distant lands. Our prosperity requires a sound international financial system and free and open trading markets. And our security is inseparable from the security of our friends and neighbors.

The simple hope for world peace and prosperity will not be enough. Our two great nations, working with others, must preserve the values and freedoms our societies have struggled so hard to achieve. Nor should our partnership for peace, prosperity, and freedom be considered a quest for competing goals. We cannot prosper unless we are secure, and we cannot be secure unless we are free. And we will not succeed in any of these endeavors unless Japan and America work in harmony.

I have come to your country carrying the heartfelt desires of America for peace. I know our desires are shared by Prime Minister Nakasone and all of Japan. We are people of peace. We understand the terrible trauma of human suffering. I have lived through four wars in my lifetime. So, I speak not just as President of the United States, but also as a husband, a father, and as a grandfather. I believe there can be only one policy for preserving our precious civilization in this modern age. A nuclear war can never be won and must never be fought.

The only value in possessing nuclear weapons is to make sure they can't be used ever. I know I speak for people everywhere when I say our dream is to see the day when nuclear weapons will be banished from the face of the Earth.

Arms control must mean arms reductions. America is doing its part. As I pledged to the United Nations less than 2 months ago, the United States will accept any equitable, verifiable agreement that stabilizes forces at lower levels than currently exist. We want significant reductions, and we're willing to compromise.

In the strategic arms reduction talks, American negotiators continue to press the Soviet Union for any formula that will achieve these objectives. In the longer range INF talks, we are pursuing the same course, even offering to eliminate an entire category of weapons. I'm very conscious of our negotiating responsibility on issues that concern the safety and well-being of the Japanese people. And let me make one thing very plain. We must not and we will not accept any agreement that transfers the threat of longer range nuclear missiles from Europe to Asia.

Our great frustration has been the other side's unwillingness to negotiate in good faith. We wanted to cut deep into nuclear arsenals, and still do. But they're blocking the dramatic reductions the world wants. In our good-faith effort to move the negotiations forward, we have offered new initiatives, provided for substantial reductions to equal levels, and the lower the level the better. But we shall wait. We still wait for the first positive response.

Despite this bleak picture, I will not be deterred in my search for a breakthrough. The United States will never walk away from the negotiating table. Peace is too important. Common sense demands that we persevere, and we will persevere.

We live in uncertain times. There are trials and tests for freedom wherever freedom stands. It is as stark as the tragedy over the Sea of Japan, when 269 innocent people were killed for the so-called cause of sacred airspace. It is as real as the terrorist attacks last month on the Republic of Korea's leadership in Rangoon and against American and French members of the international peacekeeping force in Beirut. And yes, it is as telling as the stonewalling of our adversaries at the negotiating table, and as their crude attempts to intimidate freedom-loving people everywhere.

These threats to peace and freedom underscore the importance of closer cooperation among all nations. You have an old proverb that says, ``A single arrow is easily broken, but not three in a bunch.'' The stronger the dedication of Japan, the United States, and our allies to peace through strength, the greater our contributions to building a more secure future will be. The U.S.-Japan Treaty of Mutual Cooperation and Security must continue to serve us as the bedrock of our security relationship. Japan will not have to bear the burden of defending freedom alone. America is your partner. We will bear that burden together.

The defense of freedom should be a shared burden. We can afford to defend freedom; we cannot afford to lose it. The blessings of your economic miracle, created with the genius of a talented, determined, and dynamic people, can only be protected in the safe harbor of freedom.

In his book, ``In Quest of Peace and Freedom,'' former Prime Minister Sato wrote: ``In the hundred years since the Meiji Restoration, Japan has constantly endeavored to catch up and eventually overtake the more advanced countries of the world.'' Well, I don't think I'll be making headlines when I say, you've not only caught up; in some cases, you've pulled ahead. [Laughter] Here again, our partnership is crucial. But this time, you can be teachers.

To all those who lack faith in the human spirit, I have just three words of advice: Come to Japan. Come to a country whose economic production will soon surpass the Soviet Union's, making Japan's economy the second largest in the entire world. Come to learn from a culture that instills in its people a strong spirit of cooperation, discipline, and striving for excellence; and yes, learn from government policies which helped create this economic miracle -- not so much by central planning, as by stimulating competition, encouraging initiative, and rewarding savings and risk-taking.

Our country has made great strides in this direction during the last 3 years. We're correcting past mistakes. Hope is being reborn. Confidence is returning. America's future looks bright again. We have turned the corner from overtaxing, overspending, record interest rates, high inflation, and low growth. The United States is beginning the first stage of a new industrial renaissance, and we're helping pull other nations forward to worldwide recovery.

But some in my country still flinch from the need to restrain spending. Under the guise of lowering deficits, they would turn back to policies of higher taxes. They would ignore the lesson of Japan. A look at Japan's postwar history yields two stunning conclusions. Among the major industrialized countries, your tax burden has remained the lowest and your growth and saving rates the highest. Savers in Japan can exempt very large amounts of interest income from taxation. Your taxes on so-called unearned income -- [laughter] -- are low. You have no capital gains tax on securities for investors. And the overwhelming majority of your working people face tax rates dramatically lower than in the other industrial countries, including my own. And incentives for everyone -- that's the secret of strong growth for a shining future filled with hope, and opportunities and incentives for growth, not tax increases, is our policy for America. Sometimes I wonder if we shouldn't further our friendship by my sending our Congress here and you coming over and occupying our Capitol Building for a while.

Partnership must be a two-way street grounded in mutual trust. Let us always be willing to learn from each other and cooperate together. We have every reason to do so. Our combined economies account for almost 35 percent of the world's entire economic output. We are the world's two largest overseas trading partners. Last year Japan took about 10 percent of our total exports, and we bought some 25 percent of yours. Our two-way trade will exceed $60 billion in 1983, more than double the level of just 7 years ago.

At the Williamsburg summit last May, the leaders of our industrial democracies pledged to cooperate in rolling back protectionism. My personal commitment to that goal is based on economic principles, old-fashioned common sense, and experience. I am old enough to remember what eventually happened the last time countries protected their markets from competition: It was a nightmare called the Great Depression. And it was worldwide. World trade fell at that time by 60 percent. And everyone -- workers, farmers, and manufacturers were hurt.

Let us have the wisdom never to repeat that policy. We're in the same boat with our trading partners around the globe. And if one partner in the boat shoots a hole in the boat, it doesn't make much sense for the other partner to shoot another hole in the boat. Some say, yes, and call that getting tough. Well, forgive me, but I call it getting wet all over. Rather than shoot holes, let us work together to plug them up so our boat of free markets and free trade and fair trade can lead us all to greater economic growth and international stability.

I have vigorously opposed quick fixes of protectionism in America. Anticompetitive legislation like the local content rule, which would force our domestic manufacturers of cars to use a rising share of U.S. labor and parts -- now, this would be a cruel hoax. It would be raising prices without protecting jobs. We would buy less from you. You would buy less from us. The world's economic pie would shrink. Retaliation and recrimination would increase.

It is not easy for elected officials to balance the concerns of constituents with the greater interests of the Nation, but that's what our jobs are all about. And we need your help in demonstrating free trade to address concerns of my own people. Americans believe your markets are less open than ours. We need your support to lower further the barriers that still make it difficult for some American products to enter your markets easily. Your government's recent series of actions to reduce trade barriers are positive steps in this direction. We very much hope this process will continue and accelerate. In turn, I pledge my support to combat protectionist measures in my own country.

If we each give a little, we can all gain a lot. As two great and mature democracies, let us have the faith to believe in each other, to draw on our long and good friendship, and to make our partnership grow. We are leaders in the world economy. We and the other industrialized countries share a responsibility to open up capital and trading markets, promote greater investment in each other's country, assist developing nations, and stop the leakage of military technology to an adversary bent on aggression and domination.

We believe that the currency of the world's second largest free-market economy should reflect the economic strength and political stability that you enjoy. We look forward to the yen playing a greater role in international financial and economic affairs. We welcome the recent trend toward a stronger yen. And we would welcome Japan's increasingly active role in global affairs. Your leadership in aid to refugees and in economic assistance to various countries has been most important in helping to promote greater stability in key regions of the world. Your counsel on arms reduction initiatives is highly valued by us.

We may have periodic disputes, but the real quarrel is not between us. It is with those who would impose regimentation over freedom, drudgery over dynamic initiative, a future of despair over the certainty of betterment, and the forced feeding of a military goliath over a personal stake in the products and progress of tomorrow.

You and your neighbors are shining examples for all who seek rapid development. The Pacific Basin represents the most exciting region of economic growth in the world today. Your people stretch your abilities to the limit, and when an entire nation does this, miracles occur. Being a Californian I have seen many miracles hardworking Japanese have brought to our shores.

In 1865 a young Samurai student, Kanaye Nagasawa, left Japan to learn what made the West economically strong and technologically advanced. Ten years later he founded a small winery at Santa Rosa, California, called the Fountaingrove Round Barn and Winery. Soon he became known as the grape king of California. Nagasawa came to California to learn and stayed to enrich our lives. Both our countries owe much to this Japanese warrior-turned-businessman.

As the years pass, our contacts continue to increase at an astounding rate. Today some 13,000 of your best college and graduate students are studying in America, and increasing numbers of U.S. citizens are coming here to learn everything they can about Japan. Companies like Nissan, Kyocera, Sony, and Toshiba have brought thousands of jobs to America's shores. The State of California is planning to build a rapid speed train that is adapted from your highly successful bullet train. In 1985 the United States will join Japan in a major exhibition of science and technology at Tsukuba, another symbol of our cooperation.

For my part, I welcome this new Pacific tide. Let it roll peacefully on, carrying a two-way flow of people and ideas that can break from barriers of suspicion and mistrust and build up bonds of cooperation and shared optimism.

Our two nations may spring from separate pasts; we may live at opposite sides of the Earth; but we have been brought together by our indomitable spirit of determination, our love of liberty, and devotion to progress. We are like climbers who begin their ascent from opposite ends of the mountain. The harder we try, the higher we climb and the closer we come together -- until that moment we reach the peak and we are as one.

It happened just last month. One American and two Japanese groups began climbing Mt. Everest -- the Japanese from the side of Nepal and the Americans from the side of Tibet. The conditions were so difficult and dangerous that before it ended two Japanese climbers tragically lost their lives. But before that tragedy, those brave climbers all met and shook hands just under the summit. And then, together, they climbed to the top to share that magnificent moment of triumph.

Good and dear friends of Japan, if those mountaineers could join hands at the top of the world, imagine how high our combined 350 million citizens can climb, if all of us work together as powerful partners for the cause of good. Together there is nothing that Japan and America cannot do.

Thank you very much. God bless you.

Note: The President spoke at 9:35 a.m. in the Assembly Hall of the House of Representatives at the National Diet Building. At the conclusion of the session, the President and Mrs. Reagan attended a reception with the leadership of the Diet and other Japanese officials in the Speaker's Drawing Room. Following the reception, the President and Mrs. Reagan returned to Akasaka Palace, where they stayed during their visit to Japan.