Those Guidelines will improve defense cooperation between the United States and Japan not only in the case of threats or attacks against Japan but in the case of regional emergencies. The two governments together now must develop and put into place the practical measures needed to implement the Guidelines. At the same time the United States and Japan will be carrying out the report of the Special Action Committee on Okinawa designed to consolidate U.S. bases and to make our presence in Okinawa less intrusive. It is important to do all we can to be good neighbors and to maintain good relations with the communities surrounding our bases. A second and no less important task is managing our economic relations with Japan.
Japan is the United States' second largest overseas market.
But Japan has had a persistent trade surplus with the United States and a persistent current account surplus with the world. These surpluses have begun to increase again, in part as a result of the Japanese Government's fiscal retrenchment. Japan's market is regulated in many areas and the pattern of regulations raises costs and diminishes opportunities for Japanese and foreign businesses alike. Japan's Economic Planning Agency has said the country's GDP growth rate would rise significantly if the country's economy were deregulated. Prime Minister Hashimoto subscribes to this view and has made deregulation a central goal of his government.