I

103D CONGRESS

2D SESSION H. R. 4458

To promote United States industry and technology in competition with Japan.

IN THE HOUSE OF REPRESENTATIVES

MAY 19, 1994

Mr. KOLBE (for himself, Mr. KOPETSKI, Mr. DREIER, Mr. LIVINGSTON, Mr.

HYDE, Mrs. JOHNSON of Connecticut, Mr. GILCHREST, Mr. MCCRERY,

Mr. EHLERS, Mr. HORN, and Mr. PORTMAN) introduced the following

bill; which was referred to the Committee on Foreign Affairs

A BILL

To promote United States industry and technology in

competition with Japan.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘United States-Japan

5 Export Development and Technological Competitiveness

6 Act of 1994’’.

7 SEC. 2. FINDINGS.

8 The Congress finds that—

9 (1) the United States trade deficit with Japan

10 of more than $59,000,000,000 in 1993 and the
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1 worldwide Japanese current account surplus of more

2 than $131,000,000,000 are but two measures of the

3 unfair and chronically imbalanced state of Japan’s

4 international economic relations;

5 (2) even more indicative of the closed nature of

6 the Japanese market to foreign products are statis7 tics detailing the marginal penetration of sales and

8 investment in Japan by foreign companies, particu9 larly when compared to the significant Japanese

10 penetration of the United States market;

11 (3) although Japan is the second largest mar12 ket for manufactured goods in the industrialized

13 world, in 1992, according to the Japanese Ministry

14 of International Trade and Industry, only 1.2 per15 cent of all sales and .9 percent of assets in the Japa16 nese economy were attributable to foreign compa17 nies, with United States corporate affiliates account18 ing for roughly .7 percent of total product sales and

19 approximately $89 per capita in inward direct in20 vestment;

21 (4) in contrast, in 1992 foreign corporate affili22 ates accounted for almost 17 percent of all sales and

23 20 percent of all assets in the United States econ24 omy, with an estimated 4.8 percent of total product

25 sales and $594 per capita in accumulated inward di-
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1 rect investment in the United States coming from

2 Japanese corporate affiliates, so that Japanese cor3 porate affiliates have a net sales and investment

4 penetration level in the United States that exceeds,

5 by almost 7-fold on a per capita basis, that of

6 United States corporate affiliates in Japan;

7 (5) the majority of the blame for this highly un8 balanced situation rests with the Government of

9 Japan, which has striven through an intricate mix10 ture of tariffs, controls, and domestic regulations on

11 the flow of goods and capital to, from, and within

12 Japan to keep foreign and Japanese entrepreneurs

13 desiring to do business in Japan from succeeding;

14 (6) today the market regulatory and

15 interventionary policies of the Japanese Government

16 that intentionally or unintentionally serve to keep

17 foreign companies from doing business in Japan

18 must be removed to maintain the strength of the

19 United States-Japan relationship and to improve the

20 growth of the world economy;

21 (7) United States trade and trade promotion

22 policies toward Japan must also change to reflect

23 post-Cold War priorities of export expansion and

24 technological competitiveness, the central objective of

25 which is to help United States companies become as
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1 vital a part of the Japanese industrial system as

2 Japanese companies have become in the United

3 States;

4 (8) one proven effective way in which the

5 United States Government can assist United States

6 industry in overcoming barriers to access in Japan,

7 improve awareness of scientific and technological de8 velopments in Japan, and facilitate greater coordina9 tion between United States industry and the United

10 States Government in the making of trade and tech11 nology policy is to promote the establishment of

12 United States industrial and service sector associa13 tion representative offices in Japan;

14 (9) despite the very large potential for sales in

15 Japan of goods manufactured in the United States,

16 because of the great cost of establishing representa17 tive operations in Japan, only 3 nonagricultural

18 United States industry associations have created

19 full-time offices in Japan (the auto parts, elec20 tronics, and semiconductor industries) and all have

21 relied on the partial support of funding under the

22 Market Development Cooperator Program estab23 lished under the Export Enhancement Act of 1988;

24 and
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1 (10) the expedient expansion of the Market De2 velopment Cooperator Program will have a signifi3 cant impact on facilitating greater United States ex4 ports to Japan and on enhancing the awareness by

5 United States industry of competitive developments

6 and opportunities in the Japanese market.

7 TITLE I—MARKET DEVELOP8 MENT COOPERATOR PRO9 GRAM

10 SEC. 101. EXPANSION OF THE MARKET DEVELOPMENT CO11 OPERATOR PROGRAM IN JAPAN.

12 (a) AUTHORIZATION OF APPROPRIATIONS.—In addi13 tion to funds otherwise available for such purpose, there

14 are authorized to be appropriated to the Department of

15 Commerce for fiscal year 1995, $3,000,000—

16 (1) to increase the number of United States

17 manufacturing and service sector industry associa18 tions in Japan participating in the Market Develop19 ment Cooperator Program established under section

20 2303 of the Export Enhancement Act of 1988 (15

21 U.S.C. 4723); and

22 (2) to expand the trade promotion, techno23 logical monitoring, and industry analysis activities

24 undertaken before the enactment of this Act by
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1 United States nonprofit manufacturing and service

2 trade associations in Japan.

3 (b) REPORTS ON THE PROGRAM.—Section 2303 of

4 the Export Enhancement Act of 1988 (15 U.S.C. 4723)

5 is amended by adding at the end the following:

6 ‘‘(e) REPORTS TO CONGRESS.—The Secretary of

7 Commerce shall report annually to the Committee on For8 eign Affairs and the Committee on Appropriations of the

9 House of Representatives and to the Committee on Bank10 ing, Housing, and Urban Affairs and the Committee on

11 Appropriations of the Senate on the progress the Depart12 ment of Commerce has made in implementing the Market

13 Development Cooperator Program and in allocating fund14 ing to cooperator recipients in Japan.’’.

15 TITLE II—UNITED STATES EX16 PORT DEVELOPMENT AND

17 TECHNOLOGY CENTER IN

18 JAPAN

19 SEC. 201. SENSE OF CONGRESS.

20 (a) UNITED STATES TRADE RELATIONS WITH

21 JAPAN.—It is the sense of the Congress that—

22 (1) in this post-Cold War era, promotion of eq23 uitable economic relations with all trading partners

24 and in particular Japan must be given increased em-
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1 phasis in the conduct of United States foreign pol2 icy;

3 (2) working closely with industry, the United

4 States Government should endeavor to ensure that

5 United States-owned and operated companies are

6 positioned adequately to take advantage of opportu7 nities for market entry and expansion in Japan;

8 (3) technological developments in Japan should

9 be followed closely and analyzed for their ramifica10 tions on United States industrial competitiveness

11 and economic security;

12 (4) the United States Government should be in

13 a better position to support United States industry

14 in disputes with the Japanese Government and Jap15 anese businesses and to publicize the merits of

16 United States products to the Japanese people; and

17 (5) an Export Development and Technology

18 Center established in Tokyo would assist in accom19 plishing the goals set forth in paragraphs (1)

20 through (4) and could serve as a cornerstone of a

21 new United States constructive response to the Jap22 anese economic challenge.

23 (b) PURPOSE OF EXPORT DEVELOPMENT AND TECH24 NOLOGY CENTER.—It is further the sense of the Congress
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1 that an Export Development and Technology Center in

2 Tokyo, Japan, should—

3 (1) embody a new United States Government4 industry partnership in expanding United States

5 corporate penetration of the Japanese market and in

6 monitoring, analyzing, and coordinating responses to

7 Japanese scientific and technological developments;

8 (2) provide a wide range of information to Jap9 anese consumers on the high costs of the Japanese

10 standard of living as compared to other industri11 alized nations, as well as on the benefits to Japanese

12 consumers of a more open, deregulated, and trans13 parent economy;

14 (3) correct misperceptions of United States

15 products in the Japanese media and publicize the

16 negative impact of excessive economic regulation by

17 the Japanese Government on importers and Japa18 nese entrepreneurs;

19 (4) serve to create jobs in the United States

20 and enhance the competitiveness of the United

21 States industrial base;

22 (5) help United States industries help them23 selves in the provision of detailed knowledge and

24 analysis of the Japanese market and facilitate the

25 promotion of their respective concerns and interests
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1 to the Japanese Government, business community,

2 and public;

3 (6) improve the ability of the United States

4 Government to monitor Japanese scientific and tech5 nological developments related to United States in6 dustrial competitiveness and national security and

7 centralize current efforts where desirable;

8 (7) ensure that a common United States Gov9 ernment and business community interest in increas10 ing access for United States made products to the

11 Japanese market is visibly and forthrightly promoted

12 directly in Japan;

13 (8) contain offices for export-oriented United

14 States sectoral industry associations;

15 (9) contain a Government-operated science and

16 technology information and assessment facility de17 signed to—

18 (A) centralize United States Government

19 data collection and analysis of sectoral,

20 subsectoral, and macro-trend developments in

21 Japanese science and technology; and

22 (B) ensure that science and technological

23 developments in Japan are monitored closely,

24 formally assessed for their implications to

25 United States industrial competitiveness, thor-
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1 oughly catalogued, and made available on-line

2 in computerized form to United States busi3 nesses; and

4 (10) provide office facilities for a portion of the

5 foreign office of the United States and Foreign

6 Commercial Service in Japan.

7 SEC. 202. FEASIBILITY STUDY ON THE ESTABLISHMENT OF

8 A UNITED STATES TRADE DEVELOPMENT

9 AND TECHNOLOGY CENTER.

10 (a) STUDY.—The Secretary of Commerce shall con11 duct a study of the feasibility and viability of establishing

12 a United States Government-owned and operated Export

13 Development and Technology Center in Tokyo, Japan, as

14 described in section 201(b).

15 (b) REPORT.—The Secretary shall, not later than

16 180 days after the date of the enactment of this Act, sub17 mit a report on the study conducted under subsection (a)

18 to the Committee on Foreign Affairs and the Committee

19 on Appropriations of the House of Representatives and to

20 the Committee on Banking, Housing, and Urban Affairs

21 and the Committee on Appropriations of the Senate.

22 (c) SOLICITATION OF VIEWS.—In conducting the

23 study under subsection (a), the Secretary of Commerce

24 shall solicit the views of the following individuals and
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1 groups regarding the desirability, viability, and potential

2 use of the proposed center:

3 (1) The Secretary of State, the Chairman of the

4 National Economic Council, the United States Trade

5 Representative, the Secretary of Defense, the Direc6 tor of Central Intelligence, the President of the Na7 tional Science Foundation, and the head of any

8 other entity controlled or funded by the Government

9 that the Secretary of Commerce considers has rel10 evant interests in the establishment of an export de11 velopment and technology center in Japan.

12 (2) The Government of Japan.

13 (3) United States sectoral and multi-industry

14 national trade associations.

15 (4) Any other individuals, groups, or entities,

16 public or private, whose opinion the Secretary con17 siders to be valuable in conducting the study.

18 (d) REQUIREMENTS FOR REPORT.—The report on

19 the study shall include an analysis of at least the following:

20 (1) The potential usefulness and desirability of

21 the center from the perspective of United States in22 dustry (as expressed to the Secretary) and the

23 United States Government.

24 (2) The possibility of expanding the Market De25 velopment Cooperator Program of the Department
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1 of Commerce to extend financial support to industry

2 association participants in the Center to help allevi3 ate the costs of such participation.

4 (3) The possibility of requiring United States

5 industry participants in the center to engage in—

6 (A) promoting United States goods and

7 services among potential Japanese buyers; and

8 (B) monitoring, analyzing, and reporting

9 on trade and technological developments in Jap10 anese industry, and making such reports and

11 the results of such monitoring and analysis

12 available to the United States Government and

13 the United States private sector.

14 (4) The possibility of requiring all industry ad15 visory staff at the center to possess significant re16 cent expertise in Japanese business and technology

17 affairs.

18 (5) The possibility of requiring all industry rep19 resentative offices at the center to have at least one

20 senior staff member functionally fluent in Japanese

21 language.

22 (6) The possibility of requiring all nonclerical

23 personnel to be United States citizens.

24 (7) The three best possible locations for the

25 center (ranked in order of desirability), and the pos-
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1 sibility of requiring that the primary building con2 tractor of the center be a United States-owned con3 struction firm licensed to do business in Japan.

4 (8) The possible management and oversight

5 structure of the center, including the possibility of

6 having private sector management and oversight

7 with United States Government participation.

8 (9) The total cost of the center, the possible

9 cost to the United States Government, and any cost10 sharing or cost-saving arrangements among private

11 sector and Government participants.

12 (10) The concurrent establishment of a liaison

13 facility in Washington, DC, and the prospective re14 quirements of such a facility.

15 (11) The prospective architectural design of the

16 center.

17 (12) The prospective design, construction, and

18 operational costs of the center.

19 (13) The possibility of the center containing—

20 (A) conference rooms and a small audito21 rium (80–100 persons) for conducting seminars

22 and promotional events; and

23 (B) a reference center and small library to

24 provide support services to building participants

25 and interested United States citizens.
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1 (14) The security requirements of the center

2 and possible problems with compliance to United

3 States Government laws, rules, and regulations on

4 security of government facilities.

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