Joint Announcement by
Ryutaro Hashimoto, Minister of International Trade and Industry of Japan,
and Michael Kantor, United States Trade Representative,
Regarding Autos and Auto Parts

Geneva
June 28, 1995

Following their meetings on the 26th, 27th, and 28th of June, 1995, the Minister of International Trade and Industry of Japan, Ryutaro Hashimoto, and the United States Trade Representative, Michael Kantor, make the following joint announcement:

The two Ministers recognize the central role of the automotive sector in the economy of each country, including its direct and indirect contribution to employment, production, and national wealth in each country. The two Ministers recognize the importance of expanding trade and promoting competition in this sector and growing the global economy. The two Ministers further recognize that accomplishing this objective requires concerted efforts by their respective Governments, as well as by the private sector in each country.

Minister Hashimoto has articulated, and Ambassador Kantor agrees with, four guiding principles for private sector efforts to address the international situation in the automotive sector: globalization, localization, industrial cooperation and transparency.

In this regard, Minister Hashimoto and Ambassador Kantor take note of and express their appreciation for plans announced and taken by Japanese motor vehicle manufacturers in 1990, 1992, and 1994 to increase their purchases of competitive foreign parts, both in Japan and through their transplants. The two Ministers welcome the increase in purchases that has occurred under these plans.

The two Ministers further welcome recent additional announcements by Japanese motor vehicle manufacturers of their plans to further increase overseas production of vehicles and major components and sub-assemblies, further localize procurement of parts, and further increase purchases of competitive foreign parts for use in Japan both as original equipment as well as in the aftermarket. The companies also have announced that they will ensure the transparency of their parts purchasing, and will ensure that their procurement does not discriminate against suppliers on the basis of capital affiliation.

Minister Hashimoto and Ambassador Kantor also are pleased to note the statement by the U.S. motor vehicle manufacturers expressing their plans and intent to expand their presence in the Japanese market based on offering in Japan competitive products, prices, and service.

The two Ministers recognize and understand that the plans newly announced by the U.S. or Japanese companies are not commitments and are not subject to the trade remedy laws of either country. Rather, they are business forecasts and intentions of the companies based on their study of market conditions and other forces. Both Ministers recognize and understand that changes in market conditions may affect the fulfillment of these plans.

Finally, separate from the private sector efforts mentioned above, the two Ministers are pleased to announce that the Government of the United States and the Government of Japan have successfully concluded the Framework consultations on autos and auto parts today. While these private sector efforts are not part of the Framework, the two Ministers reaffirm that the Framework addresses various governmental actions called "Measures" to be taken by the two Governments, including deregulation of repair garages that affect the repair parts market in Japan. The assessment of the implementation of the Measures, as well as the evaluation of progress achieved, will be based on the overall consideration of qualitative and quantitative criteria. Among other things, such criteria addresses trade in motor vehicles and parts, parts procurement by Japanese vehicle manufacturers in the United States, market conditions including exchange rates, and the efforts of U.S. motor vehicle and parts manufacturers to offer competitive products under competitive terms and conditions.