Ambassador Hagerty Speaks at the Japan National Press Club

Ambassador William F. Hagerty
Japan National Press Club
November 16, 2018

Thank you very much Sugita-san. It’s a great pleasure to be back here with you today. Managing Director Habu, minna-san: Konnichi-wa. It is my great pleasure to join all of you here for a second press conference here at the Japan National Press Club. As I mentioned when I was here last time, the press are instrumental in telling the story of the U.S.-Japan relationship. I’d like to begin today’s remarks with a quick “thank you” to so many of you who have helped explain and highlight the U.S.-Japan relationship to audiences here in Japan, over in the United States, and elsewhere in the world.

I think you’d agree that we have an exciting story to tell, and I look forward to continuing my work with you to begin the next chapter of America and Japan’s great partnership.

I’d like to spend the first few minutes of my remarks today to go over the tremendously successful visit by Vice President Mike Pence earlier this week. After that, I will provide a progress report on the three focus areas that I mentioned last year: America and Japan’s security, economic, and people-to-people ties.

I’d then like to bend your ear, if I may, on a few things I’ve learned, or have been reminded of, over the course of my first year as U.S. Ambassador to Japan. I’ll then be happy to take your questions after that.

Vice President Pence just paid his third visit to Tokyo since the beginning of the Trump Administration. The Vice President met with Prime Minister Abe on Tuesday, where they reaffirmed their shared goal of bolstering a free and open Indo-Pacific and welcomed concrete progress in joint efforts to develop energy, infrastructure, and digital connectivity within this region.

I’ll touch on a few of our joint projects in these remarks, but I also urge you to take a look at the joint statement on your tables for more detail.

The Vice President is a great friend of Japan, and I think that’s evident both through his longstanding ties with this country, going back to his time as Governor of Indiana, and with the strong relationships he has built with Deputy Prime Minister Aso and other counterparts here in Japan.

His visit, one of many from the Trump Administration, proves yet again that America is Japan’s closest partner and that President Trump and the rest of our national leadership consider our unshakable alliance and partnership second to none.

Next, I’d like to give you an update on my three major lines of effort on which my Embassy colleagues and I work every day.

As I explained in my introductory remarks to you last year, my team and I focus on three aspects of the relationship: security, economic, and people-to-people ties. We consider these pillars the main lines of effort that our Mission works on every day.

Security

The U.S.-Japan security alliance remains the cornerstone of peace and stability in the Indo-Pacific region. The U.S. commitment to defend Japan – through the full range of military capabilities – remains unwavering.

This year, our cooperation on regional challenges has strengthened. Our commitment to work together to enhance capability and interoperability has expanded. Since this time last year, our diplomatic and security coordination has been put to the test by North Korea’s increased nuclear and missile threat.

In close coordination with Japan, we partnered with countries in this region and around the world to mount a pressure campaign – including three rounds of successively stronger United Nations Security Council Resolutions that passed unanimously. This effort yielded Kim Jong Un’s commitment to final, fully verified denuclearization at the historic summit with President Trump in Singapore last June.

While there is still much work to be done to implement these commitments – and we will continue to engage with North Korea to do so – the daily threat of ballistic missile launches and nuclear tests that threatened the people of Japan has subsided. Thanks to the steadfast resolve of our allies in Japan and the Republic of Korea, our readiness and deterrence capabilities remain elevated, and our combined strength has kept us secure.

Meanwhile, I’d like to stress that the United States remains committed to helping Japan resolve the abductions issue with North Korea. I have met with family members of the abductees three times now, once with the President last November, once at my home earlier this year, and again very recently with our new Special Representative to North Korea, Steve Biegun. I assure you, the United States stands with those whose loved ones and family members were abducted, and we will continue to do our utmost to help bring about their return. We will never forget their suffering – or the pain that their families feel in their absence.

America’s commitment to Japan and other regional allies continues. The United States’ new, expanded defense budget this year is squarely focused on meeting the security challenges of the region, and will enhance our efforts to ensure freedom of navigation and overflight, as well as the respect for lawful uses of the sea and skies.

Here in Japan, we continue to provide our key ally with advanced defense capabilities to ensure not only the readiness and effectiveness of Japan’s Self-Defense Forces, but also their increased strength and interoperability with the United States.

At ASEAN in August, we announced nearly $300 million in regional security assistance. These funds will support maritime security, humanitarian assistance, disaster relief, and peacekeeping capabilities in countries across the region. This money will also go toward countering transnational crime.

This is more assistance than we’ve provided in the last three years combined, and it demonstrates America’s commitment to work with Japan and other partners to promote a free and open Indo-Pacific.

We will continue to work with our partners in the region to promote stability, maintain freedom of access and movement in the air, on the sea, and in cyberspace, as we address shared threats.

The key takeaways here are that our security alliance with Japan has continued to strengthen, and we are working together closer than ever before to address regional threats and challenges.

Economic Ties and Trade

This has been a monumental year for the economic and commercial aspects of our relationship.

On the Foreign Direct Investment side, there has never been a better time for Japanese companies to invest in America. Under President Trump’s leadership, the United States has streamlined regulations and has significantly reduced corporate taxes.

These changes have made the U.S. a more business-friendly environment than ever.

The U.S. economy has added more than 200,000 jobs each month over the past year. The unemployment rate is lower than it has been since 1969, almost 50 years ago. Moreover, economic growth is accelerating, business and consumer confidence is high, and wages are rising.

The United States is Japan’s top foreign direct investor. United States companies employ over 350,000 people here in Japan. Last year, Japan invested almost $44 billion in the United States, for a total of nearly half a trillion dollars that support nearly a million American jobs.

That’s great news for investors, and that’s great success for our countries.

Of course, the big story in trade this year has been President Trump and Prime Minister Abe’s agreement in New York to initiate talks aimed at reaching a bilateral trade agreement.

The United States and Japan will enter into negotiations, following the completion of necessary domestic procedures, for a United States-Japan trade agreement on goods, services, and investments. These negotiations will likely begin in early 2019.

Why did we agree to move forward on these talks? An agreement between the first and third-largest economies in the world will strengthen our economic competitiveness, and benefit producers and consumers in both countries. It just makes sense for our trade relationship to be at the same level of excellence that we enjoy in all other aspects of our relationship.

Aside from the announced start of trade talks, there’s another important development in our economic relationship that I would like to highlight. Following President Trump’s recent summit with Prime Minister Abe, our two nations announced our commitment to better protect American and Japanese companies and workers from market-distorting policies and practices by third countries like China.

The United States and Japan, along with the European Union, are pursuing discussions on World Trade Organization reform, e-commerce, and unfair trading practices. We are addressing intellectual property theft, forced technology transfer, trade-distorting industrial subsidies, distortions created by state-owned enterprises, and overcapacity. The intention behind these efforts is to collaborate with like-minded economic partners to protect our workers and economies from unfair trade practices.

If there’s a key message on our economic partnership that I could leave with you today, it’s that we’ve made huge strides both in our trade relationship and in our work overall toward promoting fair and accountable trade practices around the world.

People-to-People Ties

As I mentioned last year, the U.S.-Japan Alliance is rooted in the sustained, deep bonds between our citizens. On my first day as Ambassador, I met with Prime Minister Abe who advised me to get out of the major cities and see all that Japan has to offer.

Over the course of this past year, my family and I have traveled throughout Japan, from Hokkaido to Okinawa. We’ve seen first-hand the personal connections between our two nations.

In Kansai, my daughter Christine and I were thrilled to be a part of the excitement of the championship game of the Koshien high school baseball tournament.

My sons and I have camped alongside scouts from around Japan at this year’s Scout Jamboree on the Noto Peninsula. There I spent time with scouts from the areas hit by the flood disaster in Western Japan earlier this summer.

In Iwakuni, Mayor Fukuda and I dedicated “Friendship Blossom” dogwood trees to commemorate the deep goodwill between our troops based there and the local community at Kizuna Stadium.

My family and I explored a unique corner of Japan’s history when we hiked the Nakasendo trail from Magome to Tsumago, and met new friends in each town along the trail.

Here in Tokyo, we’re seizing the 2020 Olympics and Paralympic Games as a new way to make personal connections between Americans and Japanese. This summer, Governor Koike and I announced the Embassy’s flagship “Go for Gold” program.
In partnership with the Tokyo Board of Education, we are sending American speakers, including Olympic and Paralympic athletes, to schools throughout Kanto to talk about American culture and society.

These speakers will also discuss educational exchange opportunities with young Japanese. This is an important opportunity for us, and every American working at the Embassy will visit at least one school in the Tokyo area before the Olympics.

In English, “Go for Gold” means to strive for the best possible outcome or result. We believe the best possible outcome of the Tokyo 2020 Games – apart from being a spectacular global sporting event, which I’m sure it will be – would be a renewal of the strong personal ties that connect the people of Japan and America, and “Go for Gold” is our exciting new program making that possible.

Already, our U.S. Embassy staff have visited 30 schools, connecting with over 3,800 students since we launched the program. Starting this month, we are taking the program country-wide, and all of our consulates from Sapporo to Naha will be participating in “Go for Gold.”

My key message on our people-to-people ties is that they continue to strengthen and expand under new initiatives, including our “Go for Gold” program.

Shared Values and Ideals

A key observation I’ve made during my first year as U.S. Ambassador to Japan is that the people-to-people ties that exist between Americans and Japanese form the foundation of success for our relationship.

Without these personal connections, and the mutual understanding and friendship they provide, the ironclad strength of our security and economic ties simply would not be possible.

My family and I have had the good fortune to meet people from all walks of life throughout this beautiful country, and in doing so we have noted a kinship in terms of how we all see the world and our place in it.

How is it that, despite our differences, we tend to see things through the same lens? Where does that mutual understanding come from? How is it possible that two nations, separated by thousands of miles of open ocean, and with very different histories and cultures, can join together to form the world’s premier bilateral relationship?

I contend that the secret to the success of our relationship lies in our shared values and our shared ideals. The ideals of civic respect for all – human dignity, rule of law, freedom of the press, the support of civil society, and a faith in human progress – form the values, or a “Kachi-kan,” that both Americans and Japanese hold dear to our hearts.

Americans and Japanese vote for their political leadership. Citizens of many other countries do not. Americans and Japanese have access to a free press that holds their leadership to account. Citizens of many other counties do not. Americans and Japanese enjoy vibrant civil societies. Citizens of many other nations do not.

These values guide our actions both as individuals and as nations, and they are the key ingredient to the success of our Alliance.

Great alliances of the past have been based on military prowess or economic might, but they inevitably fall. These elements of national power, while extremely important in the short term, are ephemeral.

So how do we then guarantee the success of Japan, the United States, and our allies as we head into uncertain waters that include new challenges like cyberthreats, disinformation, and the absurd narrative that America and its allies are in a state of withdrawal from this region?

We stick to the basic ideals and values that have served our relationship well, and have empowered the Indo-Pacific region through seven decades of unprecedented economic and civil development, lifting millions of individuals out of poverty across the region.

The Indo-Pacific is of the highest importance to the United States. Eight out of the world’s 10 most populous countries, representing more than 50% of humanity, live in this region. Five of our seven treaty alliance partners, including Japan, are here. 300,000 U.S. troops are also present in this region.

The Indo-Pacific represents more than a quarter of the world economy with approximately $1.8 trillion in annual two-way trade with the United States. Moreover, the cumulative value of U.S. direct investment in the Indo-Pacific reached $940 billion last year, more than doubling since 2007.

So it’s obvious that America will continue to increase our engagement with the region, and we will stand strong with Japan and other like-minded partners to promote our shared values and ideals here. Our efforts in this area are encapsulated in our Free and Open Indo-Pacific Strategy.

We want the nations of the Indo-Pacific to be free from coercion, so that they can pursue, in a sovereign manner, the paths they choose in this region.

At the national level, we want the societies of the various Indo-Pacific countries to become ever more free – free in terms of good governance, fundamental rights, transparency, and anti-corruption. This is in line with the shared values and ideals that America, Japan, and other like-minded nations hold dear.

When we talk about an open Indo-Pacific, we first and foremost mean open sea lines of communication, open airways, and just as important, open cyberspace.

With 50 percent of trade going through the Indo-Pacific along its sea routes, particularly through the South China Sea, open lanes of transport in the Indo-Pacific are increasingly vital and important to the world.

Secondly, we mean more open economic growth through improved infrastructure. There’s an infrastructure gap throughout the Indo-Pacific. What is needed in the Indo-Pacific to encourage greater regional integration and economic growth?

We want to assist the region in developing infrastructure in the right way. We want infrastructure development that truly drives integration, does not harm the environment, and raises the GDP of constituent economies, rather than weighs them down with unsustainable debt.

Energy plays an important role toward this shared vision. Last month, the United States and Japan identified avenues to expand cooperation to advance energy sector development.

This cooperation promotes regional integration and adheres to principles of good governance, respect for the interests of all stakeholders, and transparency in bidding and financing.

We also mean more open investment. For decades, the United States has supported more open investment environments and more transparent regulatory structures. We want to foster an environment where indigenous populations, including local innovators and entrepreneurs, can take advantage of the investment environment to drive economic growth throughout the region.

We also mean more open trade. Fair and reciprocal trade is something the United States has supported for decades, and the Trump Administration is no exception.

This Free and Open Indo-Pacific Strategy is based on the ideals and values that we share with Japan and other key allies in this region. As a result, our respective strategies to address regional challenges are in complete harmony.

We are taking action, alongside Japan and other likeminded nations, to realize our shared vision of a free and open Indo-Pacific. As I mentioned earlier, we are cooperating more than ever before on security challenges, including the denuclearization of North Korea. We are deeply engaged with partners to enhance regional infrastructure and strengthen our economic ties. We are also carrying out new and exciting programs, including “Go for Gold,” to invigorate our people-to-people “Kizuna.”

Our engagement with Japan and the region is stronger than ever before, and I look forward to joining with all of you to continue to create and tell this amazing story to the world.

Thank you very much. Yoroshiku o-negaishimasu!


QUESTION (via interpreter): You focus very much on the U.S.-Japan trade relations, and we have received many questions related to this area. Let me take this one as the first question. In order to decrease the U.S. trade deficit to Japan, what is most needed? Four options: (1) Reduce the Japanese auto exports to the United States. How much reduction do we need to have? This is actually a sub-question from another person. (2) Expand Japanese companies’ American subsidiaries’ production in the U.S. (3) Import more American cars to Japan. (4) Agriculture – import more American beef and soybeans from the United States to Japan. Out of these four options, which one do you think would work the best or President Trump would like and would achieve the results that the President would like to see?

AMBASSADOR HAGERTY: That’s a fairly complicated question, but the answer I think is quite simple. It’s all of the above. I think that it’s very possible to achieve this in a way that’s good for Japan and the United States. I’m quite optimistic at the progress that we’ve made to move in the direction of a bilateral trade agreement. The President and Prime Minister had a very good discussion – one of many discussions that have been taking place over the past two years about moving forward in our trading relationship with Japan.

No two countries in the world enjoy the type of security, diplomatic, or people-to people ties that the U.S. and Japan enjoy. We need to put in place a trading relationship that is on par with the rest of our relationship and I have every confidence that now that we’ve initiated the process to develop a bilateral relationship that we will put one in place very soon. Once we do that, I think that opens the path to continue to deepen our economic ties.

You touched on several elements of how we might do that. I might go a little further. Cross-border capital flows are critical to our economic relationship, but they are also invaluable to our strategic partnership. As I mentioned earlier, the United States is Japan’s number one foreign direct investor. More American capital can and should come to Japan. I’ve been meeting with young Japanese entrepreneurs who have great ideas about innovation. I’ve been bringing over American entrepreneurs and investors, looking at new ways we can partner in areas like healthcare, robotics, artificial intelligence. New technologies and new investment can address difficult problems. They are driven by demographics, they are driven by major changes in this region, and I think that together, the U.S. and Japan can make significant strides.

With respect to putting more Japanese investment in the United States, that’s simply good business. As you know, I spent three years here with Boston Consulting Group when I lived in Japan before, and my job was to consult with companies about how to manage risk. But when a company produces its entire product here in Japan – a yen-based economy – yet prices that product in dollars, it’s putting its entire cost structure at risk. The more you can produce in the market where you sell, the closer you are to your customer, and the more you de-risk your business model by taking significant currency risk off the table.

So I expect to see an acceleration of Japanese capital moving to the U.S. market. The story there in the United States has never been better. I mentioned earlier that we’ve gone through a significant transformation in our regulatory structure. We’ve streamlined American regulations in a way that has made the business climate in America much more positive. America formerly had the highest corporate tax rate in the world. We’ve now lowered our corporate tax rate to a level that’s much more competitive. What does that mean? Return on invested capital goes up. Our market is also growing. Our GDP growth rate will exceed 3% this year, and I see a tremendous opportunity for further growth ahead. So the United States is the largest, most open, and most attractive market in the world.

I think that this story is a compelling story for Japanese companies to continue to invest.

Do I think that we’ll see more products imported to the Japanese market from America? The answer is: I hope so. But a free market and an open market will allow the best technologies and the best products to prevail. That’s good for Japanese consumers and that’s good for any country that can produce those products.

I’m also optimistic that we’re moving in a direction where an open environment will allow our economies to partner even more closely. In the face of the challenges that we confront here in this region, that’s more important today than ever. Thank you.

QUESTION (via interpreter): We have many other questions on trade, but the next one is on the change of the Republican Party in the United States. The Republican [Party], we believe, has always supported free trade. But recently, we see some very protectionist policies. We wonder why and from when the Republican trade policies have changed towards protectionism. Do you think the Republicans are going [to go] back to free trade moving forward?

AMBASSADOR HAGERTY: I’d like to start by stating the obvious. The United States is the most open major economy in the world. Japan and other countries have benefited greatly from that openness. So I want to make certain that we don’t mistake our efforts to achieve reciprocity for protectionism. What the United States is seeking to do is create a more fair and level environment for our countries to compete. Over the years, the United States has made significant investments in helping other countries develop their economies and to develop trade.

If I could, I might share a story with you. Recently, the chairman of the American Chamber of Commerce in Japan brought me a letter – actually it was a typed set of minutes from a meeting that took place in 1948 where his predecessor, the former chairman of the American Chamber of Commerce in Japan had met with General Douglas MacArthur. MacArthur called on the American Chamber of Commerce leadership to reach out to their friends and colleagues in other countries. He asked them to call their friends in Manila, to call their friends in Shanghai, to call their friends in other markets, and implore them to open their market for Japanese trade, to buy Japanese goods. This was dated 1948.

The United States has been a very hospitable environment for Japanese products, and there has been a persistent trade deficit with Japan. It hovers at around $70 billion per annum. I think that there are opportunities to open Japan’s market in a way that will be good for Japanese consumers, that will also be good for American businesses, and that will improve our trade relationship going forward. So there’s a great opportunity here, but it’s not protectionism. If anything, the United States has made tremendous investments over the years to help facilitate the growth of other economies. What we’re seeking today is to go to a more reciprocal relationship where the United States enjoys similar access to markets that other companies have for many, many years enjoyed with the United States.

QUESTION (via interpreter): Next is the Japan-Russia relationship. It’s been on the news. Regarding negotiations relating to the Northern Territories, the focus is whether to have the two islands back or not. If the two islands are going to be returned to Japan, some people are speculating whether there will be an agreement not to build American bases there or not. If there’s going to be that kind of agreement, how would the United States react to this?

AMBASSADOR HAGERTY: I’m aware of the recent reports that you mentioned on the Northern Territories, and I’m also very reluctant to begin to speculate on a hypothetical situation that’s contingent on so many other things happening, so I would defer that question to the governments of Japan and Russia, and encourage their continued negotiations to a satisfactory resolution there. But I think it’s premature for me to comment on any sort of speculation as to what our military presence might be or how it might be impacted by that.

QUESTION (via interpreter): There is another question from the same kind of angle. [As for] the Japan-Russia relationship as well as the relationship with Japan and China, there are also moves to improve the relationships under the Abe administration. What do you think of the Japanese government’s foreign policy from the views of the U.S. government? What is your posture against the Japanese government’s approach, vis-à-vis China as well as Russia? Do you think that Japan is approaching China too closely, or in the negotiation with Russia, would there be any concerns from the viewpoint of the United States that would change the security situation in Asia? Of course these are all speculation. However, regarding all of these, do you have any opinions?

AMBASSADOR HAGERTY: I’ll offer a couple of opinions in that regard. One, there is no stronger alliance in the world today than the alliance between the United States and Japan. I don’t think that any interactions that Japan has with another country will in any way impede or impair the strength of our alliance.

Of course we watch very carefully the situation with China, with Russia, and with other countries. I think many of you may be aware of Vice President Pence’s speech that he made recently at the Hudson Institute in the United States, specifically talking about our issues with China. But what we seek with China, I think, is very similar to what Japan would seek, and that is respect for the rule of law, respect for intellectual property, an avoidance of subsidization, and a respect for the sovereignty of nations.

If you look at the United States and Japan joining together with the European Union, they have together come forward to say that they would like to see the World Trade Organization reformed in a way that will drive these sort of non-market behaviors that we see from China in a better direction. Japan, like the United States, has a significant stake in China. China is a large and important market for all of us. So what we seek is actually quite simple. It’s a change in behavior. But we want to have a positive, cooperative relationship with China in the long run, not a confrontational relationship. But we simply can no long stand for these market-distorting activities that have been occurring with China. My sense is – and nothing has changed with respect to the recent trip that Prime Minister Abe led to China – is that these are shared goals between the United States and Japan.

Likewise, with respect to Russia, I think that Japan shares the same goals that we do as well in terms of respect for sovereignty. I think that the specific issue that you mentioned, for example with the Northern Territories, is an issue that has been going on for decades between Japan and Russia, and we would be delighted to see the two countries resolve those issues, but I’ll leave that to Prime Minister Abe and to Putin to work on that more directly. But I see nothing in Japan’s relationships with other countries that makes me question at all the strength of the alliance between the United States and Japan, and I can assure you that there is nothing that would lessen our resolve to the strength of this partnership and our commitment not only to Japan and its safety but our commitment to this entire region, which is significantly increasing.

QUESTION (via interpreter): Next is on North Korea. There have been some reports that North Korea is developing new weapons, and next year it is expected that a U.S.-North Korea summit will take place. But I think things are not moving forward recently. They are stalled. How are you observing North Korean trends and movements? In order to bring denuclearization forward, what do you think we need to do?

AMBASSADOR HAGERTY: First, to put in context the situation with North Korea and the progress that we’re making there, I’m thinking back to my conversation with you a year ago. At that point, we’d seen significant belligerent activity from North Korea. If you recall, schoolchildren here in Japan were wearing hardhats and practicing evacuation drills at the school. Since this time last year, we haven’t seen another bomb go off, we haven’t seen missiles flying over Japan, we’ve seen three American hostages returned, we’ve seen the remains of American soldiers fallen on the Korean Peninsula returning back to the United States. That’s a very different place than when we were together here a year ago.

The summit that occurred in June between the President and Chairman Kim was only a step in this process. It was not meant to be the conclusion. But in that step, the President secured a commitment from Kim – a commitment to move in the direction that we wanted to move. So it’s taking time to progress. I think we all want things to move more rapidly. But we’re at a fundamentally different place today than we were when we were together here last year. And I see an opening. I don’t want to be naïve, because we’ve had a long history with North Korea. But I see an opening here that feels different.

If you look at it from a logical perspective, North Korea’s economy is highly dependent on China. And by working with Japan and the United States, we can offer a path of economic development and growth for the North Korean people that I think is very positive. I think the President’s goal is to paint a picture for the North Korean people of a better life and to show them a path to get there.

I think that Chairman Kim is going to have to navigate a challenging environment at home to move in that direction, and as long as we maintain maximum pressure on the situation, I think we have a chance. But I’d like to reiterate that our strategy is to keep maximum pressure in place. Japan agrees with that strategy. And together the United States and Japan are reaching out to our partners in this region and around the world to make certain that United Nations Security Council resolutions are enforced and maintained.

And I think it’s through that combination of creating an opening, by having a conversation between President Trump and Chairman Kim – but at the same time maintaining the pressure – I think that is the path to hopefully achieve a positive result here.

QUESTION (via interpreter): I think China has a very important role in this as well. And the U.S. and China are having a sort of trade war or trade friction. At the end of this month there will be a summit in Argentina, and we’re wondering whether there’s going to be a deal or not. What do you think about this point?

AMBASSADOR HAGERTY: Like you I am very interested in what will happen in Argentina. I think the environment, though, is right to see some improvement. My expectation is that Argentina presents an opportunity to set in place a process. I would be surprised if there’s a deal that comes out of Argentina, but there could be some improvement in the situation.

China needs to understand that the United States has full resolve to stop their malign behavior when it comes to trade practices. I think the Vice President could not have been more clear, and I think China knows where we stand. Frankly, I think many people here in Japan agree with our perspective on China, and I think many people around the world feel the same.

So my hope is that the situation in Argentina is one where the two leaders can talk – where President Trump can talk with Xi – and they can at least set in place a process to begin to move forward to ease the tensions and to get to a resolution of a situation that has to be resolved.

Again I’ll come back and say that Japan and the United States are deeply involved in the economy in China. We want to get a resolution, and we’d like to see a positive resolution, and we think it will be best for the people of China, and it will certainly be better for the world’s economy the sooner we can. But we cannot let this malign behavior continue.

QUESTION (via interpreter): Thank you very much. I’m Takemoto from Ryukyu Shimpo in Okinawa. Governor Tamaki won the election, and he visited the United States, and he requested to review the Henoko plan. I am sure he met with you, Mr. Ambassador, before he went to the United States. So what did you think about Governor Tamaki’s visit to the United States, and what do you think about his position of demanding a review of the Henoko plan?

AMBASSADOR HAGERTY: First I’d like to say that my country has a great appreciation for the people of Okinawa and the friendship that they have shown to our citizens – we have a large group of citizens there with a big military presence in Okinawa, and we very much appreciate the support that we get there.

I had a very good meeting with Governor Tamaki. It was an introductory meeting, but we had the opportunity to meet at my residence and have a good person-to-person conversation. The governor made his views very clear to me, as I did with him. Our first and foremost responsibility to Japan and to this region is to maintain the readiness of our forces and to keep our capabilities high. If you consider the threats in this region, whether it’s North Korea or more broadly in the South China Sea, the need for our readiness and capability could not be more clear.

We have great cooperation with Japan, and we have a need to address in Okinawa in terms of relocating facilities there, given the way the population has grown. I conveyed to the governor our view, which has not changed, and the governor conveyed his views as well. I think through conversation and discussion we have a much better chance to help one another than by having a confrontational type of approach.

The governor was just in the United States meeting with people at the State Department and Defense Department representatives, again making his position known. But I would say at the same time, the United States’ position remains the same, and it’s driven by our overarching needs to be the strongest force here and to protect the people of Japan and the nations in this region.

QUESTION (via interpreter): I am Kanehira from TBS. As a follow-up: In the United States people from State and Defense met with Governor Tamaki, and I’m sure he mentioned the need for a trilateral meeting among the governments of Japan, the United States, and Okinawa. What do you think about this plan or idea?

I think what Governor Tamaki wanted to express was that the Henoko plan is not acceptable to the local residents, and not hearing the local voices would damage the stable U.S.-Japan alliance. So what do you think about this point?

AMBASSADOR HAGERTY: Thank you. I’m not familiar with any particular structures that Governor Tamaki might have suggested or recommended, or particular conferences or meetings that he is proposing. I would say this: We deal with the leadership in Okinawa every day. Major Smith, who is the three-star general who is responsible for our forces there in Okinawa, is a great communicator and is constantly interacting with the governments of Okinawa and the local communities. Likewise, my Consulate in Naha is, on a continuous basis, daily interacting with the people of Okinawa and the leadership there.

At the same time, our interaction has to take place at the government of Japan level. It’s a government-to-government connection that we maintain, and we have regular discussions between U.S. Forces Japan and the Ministry of Defense here in Tokyo. I’m not planning nor do I foresee any structural change in the way we manage that, although I would say I welcome communication with the people of Okinawa and with the leadership there. Governor Tamaki, I think, has gotten off on a strong foot in terms of communicating not only with me, with the head of our Marine operations there in Okinawa, but also going back to Washington and meeting with people at DoD and State. That type of cooperation and communication I think is very positive. I know that he made an early call on the prime minister, and I think he came to see Chief Cabinet Secretary Suga just a week or two later than that, so my sense is that communications are more frequent and stronger than they have been in the past, certainly since my arrival here. And I welcome communication in those regards.

QUESTION: Reuters news – my name is Chris Gallagher. I just want to ask a follow-up question on trade. You mentioned earlier some reasons why it’s of benefit for Japanese companies to invest in the U.S. – it’s an attractive market; produce in the market where you sell; you’re close to your customers. Specifically about automobiles, another way to balance the situation: Would the U.S. consider demanding a cap on Japanese auto exports to the United States?

AMBASSADOR HAGERTY: I’m certain you are looking at the U.S.-Mexico-Canada agreement terms and that’s prompting your question. It might be helpful for me to step back and explain where we are in the process of negotiating our agreement with Japan. Immediately after Prime Minister Abe and President Trump met in New York, Ambassador Lighthizer, who is our U.S. Trade Representative, initiated a process called Trade Promotion Authority. It’s a congressionally mandated process and we have a specific set of procedures that we have to move through.

So Ambassador Lighthizer initiated that. That process is under way. There’s a 90-day period that we’re in right now, and that period will end in late January. And through the course of these next weeks, Ambassador Lighthizer and his team will be consulting with Congress, with other parts of the administration, and also with industry groups to define exactly what the areas of negotiation will be. So they’re in the process now of setting the goals and objectives for the negotiations – I’m reluctant to get ahead of that, because there’s a statutory process for that to unfold. So rather than speculate on what it might entail, I think you’ll see a very open process that will – at the middle or end of January – we’ll see what the priorities are for the United States moving into the negotiations.

My sense, though, is that we will be able to quickly get to a set of issues that are important to the United States, a set of issues that are important to Japan, and get those resolved. I have every confidence in Ambassador Lighthizer – I know him well. He’s one of the world’s best trade lawyers and a very bright and practical person. I have the benefit of knowing Minister Motegi as well. He was at McKinsey here when I was at Boston Consulting Group. He’s got a strong business background. I think that he and Lighthizer will be a very good negotiating team, and my sense is that they’ll get to a quick resolution and a very positive resolution for both Japan and the United States.

QUESTION (via interpreter): I am Morooka from TV Asahi. On trade negotiation, if I may, you used the term “trade agreement on goods.” What’s the American perception on this? Maybe the Japanese government meant to limit the negotiation to goods.

AMBASSADOR HAGERTY: I think everyone has on their table a copy of the joint statement. That has the precise language of what was agreed. What was agreed was the version that’s in front of you – no other version. And I think you can see the exact wording there, where we talk about goods and other issues including services. This will be on goods, eventually services and investment. And I think you can read the exact English translation and probably report accordingly from there.

QUESTION (via interpreter): I am Fujikawa from Tokyo Shimbun. So Aegis Ashore, the F-35, and Ospreys – especially the second Abe administration is purchasing more military equipment from the United States. Could you please comment on this?

AMBASSADOR HAGERTY: The prime minister and the President have had very constructive discussions on increasing Japan’s defensive capability and interoperability with the United States. As I mentioned before, there is no stronger alliance in the world today than the alliance between our two countries. And the United States has no larger investment in the world than the investment we have right here in Japan, in terms of our assets and manpower here. And it’s to both of our countries’ benefit that we increase Japan’s capability and interoperability, and the platforms you mentioned – Aegis Ashore, Osprey, and a number of other platforms are all part of that process of strengthening and enhancing the most effective and the most interoperable force available in this region.

If you look at what’s happening more broadly in the region, you’ll see a dramatic escalation of tension from North Korea. You’ll also see activities and investments by China that fall nothing short of militarization of atolls and islands in the South China Sea. So I think that the discussions we are having are timely. I think they are important, and I also want to underscore that they are moving in a very positive direction.

MODERATOR (via interpreter): So our time is up. Lastly I would like to present the message that the Ambassador wrote in our guestbook. Could you please explain about this quote for us?

AMBASSADOR HAGERTY: I will read the quote, if that’s OK. This is a quote from a former governor of my home state of Tennessee named Sam Houston. And Governor Houston left Tennessee and eventually became U.S. senator from Texas, and was the third president of the Republic of Texas before Texas became a state. But his quote is a simple one. He says, “I have but one maxim: Do right, and risk the consequences.”

I thought that was a meaningful quote because I think it is very similar to the President’s perspective in many cases. He does what he thinks is the right thing in the long term, even though it might create short-term disruption. The goal he is trying to achieve in the long run, I think, is worth the risk that he is undertaking. I think we’re seeing it unfold with the China situation right now. We’re all hopeful that the discussions in Buenos Aires move in the right direction, but he’s going to put pressure, even though it’s uncomfortable. He will put pressure to do the right thing.