May 10, 1995 CONGRESSIONAL RECORD — SENATE S6433

The PRESIDING OFFICER. The

question is on agreeing to the amendment.

The amendment (No. 750) was agreed

to.

Mr. CHAFEE. I move to reconsider

the vote.

The PRESIDING OFFICER. The

Chair, in his capacity as a Senator

from Vermont, makes a motion to lay

that amendment on the table.

The motion to table is agreed to.

Mr. WELLSTONE. Mr. President, I

again would like to thank my colleagues.

This was, for a good many counties

in Minnesota, a very, very important

question. For all Senators, whether

Democrats or Republicans, it always

feels good to come through for people

in your State. I worked hard at this. I

thank my colleagues for their cooperation. I yield the floor.

UNITED STATES ACTION ON

JAPAN TRADE

fMr. BYRD. Mr. President, I thank

the Chair.

Mr. President, our United States

Trade Representative, Ambassador

Kantor, this morning announced a pair

of initiatives regarding our trade relations with Japan for which he is to be

commended and which deserve the

strong support of this body.

With respect to the first initiative,

Ambassador Kantor has announced a

plan to impose trade sanctions under

section 301 of the Trade Act, pursuant

to an investigation into the Japanese

auto parts aftermarket. On this issue,

this body has already spoken decisively

by agreeing to a resolution offered on

yesterday by the two leaders and myself, and the vote was 88–8. The Senate,

thereby, decisively supports the imposition of such sanctions, given the complete unwillingness of the Japanese to

address their market closing practices

which block access of the United

States parts to Japanese consumers.

This has resulted in persistent, large

trade deficits which are unfair to our

industries and cost tens of thousands of

jobs every day.

The Trade Representative is on solid

ground to publish a proposed retaliation list under section 301.

Regarding the second initiative, the

Trade Representative has also announced his intention to take a broad

case against Japan’s automotive practices before the World Trade Organization [WTO] by invoking the dispute

settlement mechanism. As stated in his

letter to the new Director General of

the WTO, the case will be based on the

fact that ‘‘Japan has failed to carry

out its obligations under the WTO’’ and

thereby ‘‘nullified and impaired benefits accrued to the United States under

the WTO’’, and ‘‘impedes the attainment of important objectives of the

GATT and the WTO.’’

As my colleagues are aware, in the

debate last December over America’s

accession to the new WTO system, the

question of the impact on United

States sovereignty by creating binding

decisionmaking dispute settlement

bodies in that organization was discussed. In fact, it seems clear that

some other nations were quick to sign

up to the WTO, specifically in order to

attack United States trade laws.

In testimony before the Senate Finance Committee today, a former United States trade negotiator, Alan Wolff,

stated with respect to the context of

negotiations creating the WTO,

Our negotiators should have begun to recognize that there was something suspect

about the U.S. proposal for an automatically

binding system when the rest of the parties

to the negotiation made an about face and

embraced it. They thought that they were

curbing America’s ability to act under section 301.

So, some opinion has been expressed

that it would be risky to go before the

WTO in that a dispute settlement panel

could rule against United States 301 action in imposing new retaliatory tariffs

on Japanese products.

But the question is, what is in the

national interest of the United States?

Let us keep our eye on the ball. The

case of Japanese discrimination on a

very persistent and massive scale has

been clear for many years in the automotive market as well as in other markets. No serious person can take issue

with this.

I commend the approach taken by

Ambassador Kantor. There should be a

good case against Japanese automotive

industry barriers before the WTO because they are so overwhelming—Japanese practices overwhelm tariff schedules and make them irrelevant to the

real dynamics of the market. If there is

not a winnable case, I, for one, would

suspect something deeply flawed with

WTO decisionmaking and not the United States’ case. Let me say that again:

If there is not a winnable case, then I,

for one, would suspect something deeply flawed with the World Trade Organization decisionmaking and not something flawed about the United States’

case.

The U.S. Trade Representative has

maintained consistently that the operation of section 301 as a bilateral mechanism regarding specific barriers and

practices is completely appropriate at

the same time that we also attempt to

breathe life into the new WTO dispute

system. WTO rules do not cover the

complete range of barriers that are

practiced by the Japanese and, therefore, 301 treatment is totally appropriate in many instances. Furthermore, as a general matter, it certainly

appears reasonable to believe that if

Japanese practices nullify the value to

be gained from the tariff-lowering regime of the GATT, then the United

States should prevail in a World Trade

Organization dispute.

The Trade Representative has established a two-track approach taking the

initiative before the WTO and exercising our bilateral rights under our trade

law. I do not see any inconsistency in

this approach. It is the right approach

because our practices in our market

are transparent and open, while Japan’s practices are not. Thus, it is a

fair challenge to the WTO to recognize

and act on the reality of the market

situation.

Mr. President, I ask unanimous consent to have printed in the RECORD the

letter sent yesterday from Ambassador

Kantor to the new Director General of

the WTO, Mr. Renato Ruggerio, which

gives prefiling notification of the intention of the United States to initiate

a WTO challenge against Japanese

automotive discrimination. In addition, I also ask unanimous consent to

include an op-ed piece from today’s

Washington Post by the vice chairman

of the Chrysler Corp., Mr. Thomas G.

Denomme, outlining in detail problems

that Chrysler has experienced in attempting to break into the Japanese

market.

There being no objection, the material was ordered to be printed in the

RECORD, as follows:

EXECUTIVE OFFICE OF THE

PRESIDENT,

U.S. TRADE REPRESENTATIVE,

Washington, DC.

RENATO RUGGIERO,

Director-General, World Trade Organization,

Geneva, Switzerland.

DEAR DIRECTOR-GENERAL: I am writing you

today to give pre-filing notification of the

intention of the United States to invoke the

dispute settlement mechanism of the WTO to

challenge the discrimination against United

States and other competitive foreign products in the market for automobiles and automotive parts in Japan. It is our intention to

officially file a case with the World Trade

Organization (WTO) in approximately 45

days.

Through its actions and inactions with respect to the automotive sector, Japan has

failed to carry out its obligations under the

WTO, has nullified and impaired benefits accruing to the United States under the WTO,

and has fostered a situation in the automotive sector that nullifies and impairs such

benefits, and impedes the attainment of important objectives of the GATT and the

WTO.

The market access problems in the automotive sector reflect problems endemic in

many sectors in Japan. Relative to gross domestic product, Japan imports far fewer

manufactured goods than any other G–7

country and maintains a persistent surplus

in its global trade and current accounts. Japan’s imports of manufactured goods are

one-fifth to one-tenth the level of European

countries and nearly one-third the level of

the United States, relative to GDP. Overregulation, toleration of market restrictive

practices and market structures, and pervasive and unwarranted intervention in the

Japanese economy all work together to systematically discriminate against foreign

competitive imports.

The United States has focussed on the

automotive sector because of its central importance to the United States and other

economies, and its huge contribution to the

U.S.-Japan trade imbalance. This sector accounts for almost 5 percent of the U.S. GDP,

and it directly provides jobs for 2.5 million

Americans. The 1994 U.S.-Japan trade imbalance in the automotive sector was $37 billion, nearly 60 percent of the total U.S. trade

deficit with Japan and nearly a quarter of

the entire U.S. global trade deficit.
S6434 CONGRESSIONAL RECORD — SENATE May 10, 1995

This trade imbalance reflects a lack of access for foreign autos and auto parts to the

Japanese market for the past 35 years. In

Japan today, foreign automobiles have a 4.6

percent share of the market. In the United

States, foreign autos occupy a 32.5 percent

share of the market. Throughout the rest of

the G–7, foreign cars range from 33 to 55 percent of the market. In Japan, foreign auto

parts account for only 2.6 percent of the market. In the United States, foreign parts make

up 35 percent of the market. Throughout the

rest of the G–7, the market share of foreign

parts ranges from 16 to 60 percent.

While we are first and foremost concerned

about the impact of Japan’s automotive barriers and restrictive practices on the interests of U.S. companies and workers, this is a

general international economic problem, adversely affecting the interests of many trading nations. Japan’s huge trade imbalances

in the automotive sector contribute substantially to unstable international economic

conditions which undermine global economic

recovery and growth, and the health of the

international trading system.

The Government of Japan in the past implemented measures to protect the domestic

automobile industry, such as discriminatory

allocation of capital, foreign investment restrictions, high tariffs, and a range of other

measures. As these barriers were removed

and as tariffs were reduced through multilateral tariff negotiations, the Government of

Japan developed other measures to protect

domestic producers from foreign competition. Such measures included, among others,

excessively burdensome inspection requirements for imported vehicles, discriminatory

access to vehicle registration data, and

maintaining an unreasonably complex system of motor vehicle inspection and repair

regulations.

At the same time, the Japanese automotive sector as it has developed has been

pervasively characterized by close interlocking relationships between auto manufacturers, suppliers, distributors, dealers, and

those who repair and inspect cars. The Government of Japan has guided or tolerated the

creation by industry of informal market restrictive measures and market structures,

which have placed a critical role in excluding foreign competitive suppliers of autos

and auto parts from the market.

Foreign motor vehicle manufacturers now

face a situation in which limited access to

auto dealerships—which until recently were

prohibited from carrying products from competing suppliers and which still fear that

carrying a competitor’s products will damage their relationship with their current supplier— seriously impedes market access. In

addition, foreign auto parts suppliers find it

virtually impossible to sell high value-added

parts to Japanese manufacturers.

In the auto parts aftermarket, excessive

and complex regulations channel most repairs to garages tied closely to Japanese

parts manufacturers, which results in market discrimination. While we are very conscious of the need for any country to establish regulations pertaining to safety and the

environment, the Japanese regulations in

the aftermarket go far beyond what is necessary to protect those interests, and are applied with the effect of creating unnecessary

obstacles to international trade. Japan has

chosen to create and maintain a regulatory

system which effectively locks out foreign

competitors and imposes extraordinary additional costs on Japanese consumers. According to our estimates, Japan’s 34 million

households would save $24 billion annually

from deregulation of the auto parts

aftermarket.

As you are aware, the United States and

Japan have been discussing measures to substantially increase access and sales of foreign competitive autos and auto parts in the

Japanese market. After long negotiations,

the United States and Japan have been unable to reach agreement regarding any of the

three principal areas—access and sales of

motor vehicles, original equipment parts,

and replacement parts—that are crucial to a

meaningful solution.

I have directed a task force of lawyers and

economists to ready our case for submission

to the WTO. I must underline the seriousness

of our intentions in this matter.

Yours sincerely,

MICHAEL KANTOR.

JAPAN: ONE-WAY TRADE TACTICS

U.S. Trade Ambassador Mickey Kantor is

currently toe to toe with the Japanese in the

most contentious trade negotiations to date.

The aim is to open Japan to American vehicles and parts. Agreements have been

reached in theory to open Japan to foreign

insurance, medical equipment, telecommunications equipment and glass. But the toughest and most important sector—automotive—remains unresolved.

The total American trade deficit with

Japan last year was $66 billion, and 60 percent of that—more than $36 billion—was in

auto trade alone. We can’t fix the trade gap

with Japan unless we fix the auto sector.

And make no mistake, the Japanese domestic industry is virtually closed to foreigners

and will remain closed unless we, as a nation, force them to open it. Here are just a

few facts:

American companies have sold 400,000 vehicles in Japan in the past 25 years. Japanese

companies have sold 40 million in this country. Japanese consumers bought 6.5 million

vehicles last year. Only 301,391 were imported—less than 5 percent of the market.

We project that Big Three sales in Japan will

increase this year by about 12,000 vehicles.

Japan ships that many to the United States

every three days. The Japanese auto parts

market is worth $107 billion per year. America’s world-class suppliers have less than 2

percent of that business, even with the weakest dollar since World War II.

Japan does not play by the same rule book

as Western nations. It is a closed, mercantilistic society with government and business

working hand in hand to prevent any serious

foreign competition in the home market,

while waging an economic war of conquest in

overseas markets. With the second-largest

economy in the world, Japan is simply too

big and too important for such behavior to

be tolerated. It also sends the wrong message

to newly developing economies that one-way

trade is an acceptable model to follow. It is

time for the Japanese traders to grow up and

act like responsible economic adults in the

world trading system. That system is based

on reciprocity. You can sell to us if we can

sell to you.

Totally free trade has always been a textbook theory. It has never existed in reality.

However, when a major trading nation consistently and egregiously violates the rules

of reciprocity to beggar its neighbors, it can

ultimately lead to the collapse of world

trade. Other nations eventually find the

costs of such violations to their own producers to be too great, and a major trade war develops.

The Japanese or their apologists continually protest that their auto markets are

not closed to imports. It’s just that we don’t

try hard enough, or that our vehicles are too

big or that the steering wheel is on the

wrong side.

It all boils down to an argument that Japanese roads and drivers are unique and unsuited to ‘‘foreign’’ vehicles and parts—just

as a Japanese baseball was unique and unsuitable for ‘‘foreign’’ bats, and Japanese

snow was unique and unsuitable for ‘‘foreign’’ skis and just as (for 23 years) Japanese

stomachs were unique and unsuitable for

‘‘foreign’’ apples. The list is endless, and the

arguments are all bunk.

All of the U.S. companies have right-handdrive vehicles. Chrysler was the first of the

Big Three to export a right-hand-drive vehicle from the United States to Japan with the

Jeep Cherokee. The sport utility segment is

an increasingly popular segment of the Japanese market, just as it is in the United

States and Europe. Last year, 197,877 sport

utility vehicles were sold in Japan. Chrysler

sold 13,208 vehicles in Japan; 12,701 of them

were Jeep vehicles. That is an improvement

over 1993, but it is still not a level we would

expect in an open market. Japanese officials

contend that our sales are going through the

ceiling. If so, it’s a very low ceiling. Those

12,701 Jeep vehicles represented only 6.4 percent of the sport utility market in Japan.

In the United Kingdom, a market we have

only recently entered, we captured a 30 percent share of the gasoline-powered sport utility market. Both markets are right-hand

drive. Both have domestic sport utility manufacturers. If we had achieved a 30 percent

share in Japan, our sales would have totaled

59,363 vehicles in 1994.

Chrysler projects sales in Japan of 20,000

vehicles in 1995. This increase can be attributed to a number of things—favorable exchange rates, competitive pricing on our vehicles (we just lowered our Jeep prices by 10

percent), the popularity of the sport utility

segment and, certainly, the current negotiations and pressure by the Clinton administration. History shows that Japan doesn’t

liberalize entry unless there is a reason to do

so.

Last year, Chrysler opened a new office in

Tokyo and expanded our staff there. In early

1996 we will introduce a right-hand-drive

Grand Cherokee in Japan, followed by a

right-hand-drive Neon and, in early 1997, a

right-hand-drive version of our new minivan.

We are making these substantial commitments of money, time and engineering talent

because we are counting on the continued efforts of the U.S. government to expand entry

into the Japanese market and other auto

markets around the world.

Chrysler is committed to breaking into the

Japanese market and will continue to expand our presence there with more products

and staff support and by testing the Japanese auto manufacturers’ latest message:

that Japanese dealers are free to sell whatever vehicles they choose. We will be knocking on dealers’ doors, trying to establish

broader distribution opportunities for our

products. We will provide Japanese dealers

with more products and profits. And we will

offer the Japanese consumer a wider choice

of vehicles.

A trade agreement that provides real access to Japan’s vehicle and parts markets is

critical, not only to the Big Three and our

employees, but to all of the related industries that supply the industry: semiconductors, electronics, steel, aluminum, chemicals, rubber, machine tools and many others.

All told, about 1.5 million employees of

America’s automakers and their suppliers

are waiting for Japan to remove its ‘‘do not

enter’’ sign.

Regardless of successes in other sectors,

the U.S.-Japan framework negotiations will

fail both the American producers and the

Japanese consumers if the automobile sector

is not opened to U.S. vehicles and parts.

Mr. BYRD. Mr. President, I yield the

floor.

I suggest the absence of a quorum.
May 10, 1995 CONGRESSIONAL RECORD — SENATE S6435

The PRESIDING OFFICER. The

clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. SMITH. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

INTERSTATE TRANSPORTATION OF

MUNICIPAL SOLID WASTE ACT

fThe Senate continued with the consideration of the bill.

AMENDMENT NO. 751

Mr. SMITH. Mr. President, we have

an amendment offered by Senator

KEMPTHORNE. I send the amendment to

the desk and ask for its immediate consideration.

The PRESIDING OFFICER. The

clerk will report.

The assistant legislative clerk read

as follows:

The Senator from New Hampshire [Mr.

SMITH], for Mr. KEMPTHORNE, proposes an

amendment numbered 751.

Mr. SMITH. Mr. President, I ask

unanimous consent that reading of the

amendment be dispensed with.

The PRESIDING OFFICER. Without

objection, it is so ordered.

The amendment is as follows:

On page 69, line 13, strike the word, ‘‘remote’’.

On page 69, line 19, after the word, ‘‘infeasible’’, insert the word, ‘‘or’’.

On page 69, lines 21 and 22, strike the

words, ‘‘the unit shall be exempt from those

requirements’’ and in lieu thereof insert the

words, ‘‘the State may exempt the unit from

some or all of those requirements’’.

On page 69, line 22, add the following new

sentence: ‘‘This subsection shall apply only

to solid waste landfill units that dispose of

less than 20 tons of municipal solid waste

daily, based on an annual average.’’.

Mr. SMITH. Mr. President, this

amendment offered by the Senator

from Idaho has been agreed to on both

sides.

There is no objection on either side.

It is a technical amendment to title III

and it deals with ground water monitoring.

The PRESIDING OFFICER. If there

be no further debate, the question is on

agreeing to the amendment.

The amendment (No. 751) was agreed

to.

Mr. SMITH. Mr. President, I yield

the floor and suggest the absence of a

quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. CHAFEE. Mr. President, I ask

unanimous consent that the order for

the quorum call be rescinded.

The PRESIDING OFFICER. Without

objection, it is so ordered.

The Senator from Rhode Island [Mr.

CHAFEE] is recognized.

Mr. CHAFEE. I thank the Chair.

(The remarks of Mr. CHAFEE pertaining to the introduction of S. 786 are located in today’s RECORD under ‘‘Statements on Introduced Bills and Joint

Resolutions.’’)

Mr. CHAFEE. Mr. President, I suggest the absence of a quorum.

The PRESIDING OFFICER. The

clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. DEWINE. I ask unanimous consent that the order for the quorum call

be rescinded.

The PRESIDING OFFICER (Mr.

THOMPSON). The Senator from Ohio is

recognized.

Mr. DE

CRIME IN AMERICA

WINE. Mr. President, in the

fcoming weeks the Senate will once

again turn to the very important issue

of crime. Within the next few days I

will be introducing on this floor a

crime bill of my own. Over the next 4

days I intend to discuss on each one of

those 4 days a different aspect of the

crime bill that I will be introducing.

Today, I would like to start by talking about two truly fundamental and

basic issues and questions. First, what

is the proper role of the Federal Government in fighting crime in this country? Second, despite all of the rhetoric,

what really works in law enforcement?

What matters? What does not matter?

What is rhetoric and what is reality?

What can the Federal Government do

to help local law enforcement? Because, Mr. President, the fact is that

over 90 percent of all criminal investigations, prosecutions, and trials do

not occur at the Federal level. Rather,

they take place at the local and State

level.

This means that one of the criteria

for any crime bill has to be the impact

that bill will have on the ability of

local communities themselves to fight

crime. Of any crime bill, we have to

ask this question: Does it help or does

it hurt the local crimefighters, the men

and women who are on the front line

every single day? Mr. President, if it

does help, does the help it gives help

permanently or just over the short

run? In other words, are we going to

get any lasting impact in our battle

against crime for the billions of dollars

that we are talking of spending at the

Federal level?

Mr. President, the role of the Federal

Government first and foremost is to do

those things that the local community

cannot do for itself. I believe the Federal Government has to provide the

tools to a local community to fight

crime, tools that they could not have

but for the help of the Federal Government.

One major Federal responsibility

that I would like to discuss today is

the creation and maintenance of a national criminal records system. The

idea is really very basic and very simple. We need to make it possible for

any police officer anywhere in the

country to access a national data base,

a fully automated data base, data

bank, which includes information on

fingerprints, DNA, ballistics, outstanding warrants, and complete criminal

record history of suspects and of those

who have previously been convicted of

crimes.

I believe that this system will be an

absolutely essential component of local

law enforcement in the 21st century.

We already have much of this technology in place today, but, quite frankly, it will only become more important

in the years ahead. That is why we

need to focus on it today, this year,

this crime bill. We have to build this

system correctly from the beginning.

Mr. President, we will soon be considering the single largest crime fighting

bill in the history of this country. If we

do not focus on this technology issue

now as part of this crime bill, we never

will again have the opportunity to do

it and to do it correctly. I think that

would be tragic, because if we do not do

this it will be much more difficult later

on for police to fight crime. Conversely, if we do do it, we will solve

crimes. We will save people from becoming victims. Yes, we will save lives.

I think that really is what is at stake.

Mr. President, if we do not do this

now, it will be more difficult for the

police to solve crimes committed by

the same individual in different

cities—to catch, for example, a criminal who used the same gun to commit

crimes in both Washington, DC, and

Baltimore, MD. It will be more difficult to keep track of sex offenders

and to prevent them from repeating

their offenses.

Mr. President, when a felon is fleeing

from justice and inadvertently falls

into the hands of law enforcers in some

other jurisdiction, those arresting officers will not know through fingerprints

that that person is wanted, let us say,

for kidnapping or a terrorist act—kidnapping a child.

Mr. President, when a brave police

officer pulls someone over on a deserted highway in the middle of the

night, that police officer will not know

the kind of person he is pulling over,

will not know that the person he has

pulled over is a convicted criminal,

maybe a fugitive from justice.

Local police work hard and do a

great job. They deserve much better

than this. They deserve to have the

best technology that we can give them.

To do that they need national help.

They need the technological backup

that only a fully functioning national—national—system can provide.

For local law enforcement to get the

maximum benefit from a national system, we have to grow this national system locally.

The unique thing about law enforcement in the United States, a country

with a Federal system, not a top-down

system, of government, is that you can

only have a national system if the

local law enforcement people build it

up themselves. To attempt to create a

national system from the top down is

like trying to create a TV network if

nobody has a television.