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Friday, January 14, 2000

For Further Information Please Contact:
Daniel Cruise or Curt Cultice (202-482-3809

Under Secretary Aaron Urges Japan to Take
Further Action on Public Construction

Los Angeles, California — Late Thursday, the U.S. told Japan more needed to be done to open its public construction market to U.S. firms. U.S. Under Secretary of Commerce for International Trade, David L. Aaron and Japanese Foreign Ministry Director-General, Shotaro Oshima both participated in the first-ever high-level 'out of cycle' review of the U.S.-Japan public works agreements. At the conclusion of the talks Aaron said that while some progress was made, much remained to be done.

On a positive note both sides agreed to continue the US-Japan Construction Cooperation Forum. The first forum in October began the process of promoting more joint ventures between U.S. and Japanese companies. Japan also agreed to review bidding criteria which have historically limited U.S. access to its market.

"These are positive but small steps," Aaron said. "I am eager to see more results emerge from the Construction Cooperation Forum process," he added.

Aaron pointed out that last year American companies were only awarded $50 million (0.02%) worth of contracts in Japan's $250 billion public works market. And so far this year, U.S. firms have been awarded a mere 15 design/consulting and construction contracts valued at only $40 million.

"I am withholding final judgment until we see the results for the entire Japanese fiscal year which ends in March,"Aaron said. "I, once again, urged my Japanese counterparts to award more design/consulting and construction contracts to U.S. firms," he added.

Aaron also called for the elimination of serious restrictions limiting the ability of U.S. firms to enter into joint ventures. This practice has been keeping U.S. firms from participating in numerous contracts.

"The bottom line remains that, proportionally, Japanese firms do twelve times as much public construction business in the United States as U.S. firms do in Japan even though U.S. firms are the most competitive in the world. This is obviously unsatisfactory and has to change," Aaron concluded.





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