Remarks Following Discussions With Prime Minister Yasuhiro Nakasone of Japan

April 14, 1986

The President. Prime Minister Nakasone and I have just completed 2 days of discussions on bilateral and global issues. And I'm happy to report that the relationship between our two countries remains strong and vital. Our meeting has reaffirmed my conviction that the close relationship between us is of immense importance for our two peoples and for the rest of the world. The friendship between our two nations is mirrored in the personal respect and affection that the Prime Minister and I have for each other, an affection that is held also by the Japanese and American peoples.

Yesterday at Camp David and this morning here at the White House we had, as always, much to talk about. In discussing relations between the United States and the Soviet Union, including arms control, the Prime Minister expressed his support for efforts towards the convening of a summit meeting with the Soviet Union. We agreed on the need for the democratic nations to remain united. We also reviewed our defense relationship and reaffirmed that the U.S.-Japan treaty of mutual cooperation and security is the foundation of peace and stability in the Far East and the defense of Japan.

As you can imagine, the state of U.S.-Japan trade relations was a major topic during our meeting. But I told the Prime Minister that this issue is one of vital concern to all Americans, as reflected in the strong views of many in Congress. We agreed on the necessity to continue to intensify efforts to expand trade through better market access. The Prime Minister informed me that he is dedicated to fulfilling Japan's responsibility as the free world's second largest economic power to strengthen the international trading system. He and his government are committed to a national goal of reducing Japan's trade surpluses. The Prime Minister also informed me of an important, recent report which outlines some very significant changes that Japan intends to make. He is determined to implement fundamental policy changes, and I applauded the Prime Minister's commitment to leading his nation toward an economic future more in harmony with the needs of global economy.

The Prime Minister and I agreed on the vital importance that this plan involve a strategic increase -- or, pardon me, a significant increase in Japanese imports, particularly of manufactured and other high, value-added goods. In a similar spirit, I committed my administration to launch a strengthened program to promote exports to Japan. The trade imbalance between the United States and Japan results from complex factors that will take time, vigorous efforts, and patience to correct. There are no quick or easy fixes, but we do know protectionism is not the answer. We've already made substantial progress and are convinced that working together, with urgency and commitment, we'll find ways to solve our problems through a trading relationship that is both balanced and extraordinary.

As part of this common effort, I've asked Secretaries Shultz and Baker, and the Prime Minister is instructing his relevant ministers, to pull together a broad group of high-level officials to discuss structural economic issues of mutual concern. We will continue work on better market access. We discussed the Tokyo summit. Its preparations are going well, and the Prime Minister and I are looking forward to continuing our discussion next month in Tokyo with the expectation that the summit will register a message of bright hope for the future. We discussed a number of other regional topics, focusing on Asia, and shared in particular our thoughts on the progress being made by the new government in the Philippines and on the importance of assisting that government in dealing with its national problems.

I note that Japan has become the second largest donor of economic assistance worldwide. Our governments will continue close consultations to increase the effectiveness of our individual contributions. The Prime Minister and I agree that we both have complex problems and immense opportunities before us. The key to realizing the full potential of this unique bilateral relationship is mutual understanding and close cooperation. Together, there is nothing we cannot accomplish, and I might add that that was the spirit of our discussion during these past 2 days.

The Prime Minister. President Reagan and I met in a relaxed atmosphere over the weekend. The President and I share the views that we should work together to send throughout the Tokyo summit a message of a bright prospect for and confidence in the future to the peoples of the world -- the developed and developing alike. We reaffirmed the importance of promoting world peace and disarmament, and of the U.S.-Soviet summit in this regard, and the necessity of promoting the new round of multilateral trade negotiations for the furtherance of the free trading system. The President and I had a frank exchange of views on economic issues between our two countries.

Upon hearing once again the President's strong determination to continue his resolute fight against protectionism, I expressed my firm support to him. I also discussed with him the role to be played by Japan to the same end. Japan upholds the principle of free trade. I talked with the President about these steps we have taken to improve Japan's market access in the past years and told him that Japan will continue its efforts to this end. The President and I share the recognition that a change which has taken place in the yen-dollar exchange rates will contribute to the adjustment of the trade relations between Japan and the United States. I told the President that Japan is determined to work at its national policy goal toward steadily reducing the current account imbalance to one consistent with international harmony. To this end, I believe that Japan must tackle the epoch-making task of structural adjustment and transform its economic structure into one dependent on domestic demand, rather than exports leading to a significant increase in imports, particularly of manufactured products. Recently, my private advisory group produced a report containing many variable recommendations in this regard. In order to translate the recommendations into policies, the Government will set up a promotion headquarters which will formulate a work schedule very shortly.

Structural adjustment is no easy task in any country. But Japan must effect an historic turn, and I am determined to accept that challenge. The President wholeheartedly welcomed this approach. At the same time, I hope that other countries will also deal with their own difficult problems through structural adjustment. Better convergence on policies among the nations concerned will be a key to revitalization of the world economy. The President and I welcomed the agreement reached yesterday to hold the bilateral dialog of higher shelves on structural problems.

I pay my respect to the President for his strong determination to work towards more stable East-West relations and substantial reduction of nuclear weapons and strongly hope that the momentum for U.S.-Soviet dialog spurred by a summit meeting between the two leaders last November will move forward steadily. The President and I reaffirm the importance of maintaining close communication and coordination among the countries of the free world. In this connection, I told the President that I highly value his efforts toward the total elimination of INF on a global basis with adequate consideration to the Asian region.

In our discussions on regional issues, the President and I reaffirmed the need for Japan and the United States to further cooperate for the development and stability of the Philippines and their President Aquino, and for us each to contribute to the stability of Central America and other countries, and to the improvement of economic situations and easing of the debt burden of the European countries. I expressed to the President my appreciation for the fact that the defense relationship between Japan and the United States is now better than ever before and told him that Japan intends to proceed further with its efforts on its own initiative to improve its defense capabilities, together with further strengthening the credibility of the Japan-U.S. security arrangements.

Mr. President, I am very happy to have been able at your kind invitation to come to meet you in spring green of Camp David, to reaffirm my unshakable friendship with you. Today the cooperative relationship between Japan and the United States is expanding its truly global dimensions and is ever growing in importance. I am convinced that we can overcome whatever obstacles may stand in our way and make great contributions to peace and prosperity of all the peoples of the world if our two peoples trust each other and make the best possible use of the vigor of each.

Thank you.

Note: The President spoke at 11:32 a.m. in the Rose Garden at the White House. Earlier, the President and the Prime Minister met in the Oval Office. George P. Shultz was Secretary of State, and James A. Baker III was Secretary of the Treasury. On April 13, the President and the Prime Minister met at Camp David, MD.