Many of the steps that the Obuchi Administration has taken in recent months have been very positive, and should be recognized. Tax and budget policy has provided an important support to the economy. Major new steps have been taken to stabilize and strengthen the financial sector, including improvements in supervision and disclosure, publicly funded bank re-capitalization, and resolution of failing institutions. Yet we must also realize that there will be no quick fix for many of the problems that ail the Japanese economy. Over capacity remains serious in many sectors.
Consumer spending remains weak, with income growth low.
These are serious concerns that both sides must mutually address. Let me say a few words about some of our longstanding trade concerns. Steel imports from Japan have been a serious concern over the past year, as is well known. Yet those imports are fortunately trending down from the high levels of 1998. The President had strongly and persistently raised our concerns with Prime Minister Obuchi on many occasions, so we are encouraged by the recent general trends.