The latest package of reforms from this initiative, agreed to by President Clinton and Prime Minister Obuchi just last spring, should have a real impact in further opening Japanese telecommunications, housing, pharmaceutical, financial, energy, and retail sectors to competition. In our discussions, we have called upon the Government of Japan to open these markets, to rewrite regulatory policies in a more transparent, less cumbersome manner, to encourage competition and the introduction of new products and services, and to reduce barriers to investment. Telecommunications is one of the best examples of how regulatory reform can reduce prices, provide more innovative services, and stimulate broader economic growth. Unfortunately, simply declaring a market open is not sufficient to create competition in an industry where one player is dominant and controls resources required by all other competitors. Actions of particular importance are lowering interconnection rates, providing timely and reasonable access to facilities needed to build new networks, and ensuring fair pricing.
Investment is another element crucial to the vitality of our economic partnership.
In the US, foreign direct investment supports more than 5 million American jobs. In fact, throughout our history, foreign investment helped build our continent-spanning railroads and canals, our telecommunications, and our factories. Now foreign investment is helping finance America's great high-tech and telecommunications revolution. And 123.5 billion dollars of the FDI entering the U.S. in 1997 came from right here in Japan. By contrast, although American investment in Japan has picked up sharply in the last couple of years, especially in the financial sector, it is still much lower than it could be.