Remarks During a Roundtable Discussion With Export Trade Industry Representatives in Tacoma, Washington

April 19, 1984

The President. I thank you for the warm greeting that you've given us already, and I want to thank George Weyerhaeuser in particular for his generosity and for letting us have the use of this hall.

I know that we're going to talk about foreign trade this afternoon, and I'd like to begin by pointing out that the backdrop for all these issues is the economic climate here in our own country. And I know you're all familiar with the turnaround that we've accomplished. We're enjoying an economic revival here in the States, and I think we've got a lot to be proud of.

Inflation has dropped very definitely. Industrial production is surging to the point where we're creating an average of some 300,000 jobs a month.

I thought it was very telling when for the month of March, the figures on unemployment came in and it had not changed in the percentage. We still had 7.7 percent unemployment, but there were 248,000 more people working than had been working in the previous month. And I'm not adept enough to figure how all that can take place and not change the percentage, but I know there's a reason for it. We're creating, in other words, the new jobs that we need to accommodate our growth.

Factory orders and retail sales are strong. Housing starts are still strong despite last month's drop. And I've often wondered, sometimes, the way last month's drop was treated, what the reporting would have been like on the evening news if they'd been around at the time of the 1929 stock crash.

But in the past year and a half, we've enjoyed the steepest drop in unemployment in over 30 years. Prime rate is nearly down to the halfway point from when we came into office. But we know we have much more to do with regard to interest rates.

That's the backdrop, or real American comeback story, and I think it's just begun.

I know you're eager to talk about trade with the Asian nations, especially China and Japan. And I just saw that big ship down there being loaded with logs and lumber for China, and that's as good an illustration as any of the big increase in U.S.-China trade over the past few years. The United States is now China's third largest trading partner. We have over a hundred American companies with offices there, and the United States is now China's leading foreign investor.

We want to further improve the investment climate. We've already signed a series of bilateral agreements with China covering trade and financial matters. And when we arrive in Beijing next week, I'll continue our talks on agreements involving taxes and financial investment.

There are other trade issues that we're still resolving with China, and I know that as in any relationship, there are going to be some growing pains. You know, as I do, that occasionally the interests of diplomacy and the interests of American industry sometimes seem to collide. Well, I see it as our job to reconcile the two and to make it easier for American businessmen to open up new markets on a fair footing.

We've begun some initiatives in that direction. Two years ago, after the preceding administration tried, we passed the Export Trading Company Act aimed at opening up new foreign trade opportunities for medium- and small-sized businesses. The bill removed impediments to trade and permitted companies to sell American products overseas more efficiently, more effectively.

We're also implementing our international investment policy to lessen the number of government measures that distort or impede the international investment flows.

Now, these are just some of the efforts. I know that you're good traders, but I know you have problems, too, including the continuing problem of state-subsidized goods from other nations, some of which are doing this in violation of international agreements.

And then there's Japan. Japan's been a fine friend of the United States in many respects. We still have a lot of trade questions to work out with Tokyo, but we've made some major progress in the last 2 years. Just a few weeks ago, Japan agreed to virtually double the beef quota. And they also dramatically eased restrictions on the import of various citrus projects -- or products.

And Japan helped our automobile industry get enough breathing room to recover from the siege of double-digit inflation and record interest rates that nearly destroyed us. As a matter of fact, today, the entire automobile industry, as an industry, has an unemployment rate of only 5\1/2\ percent. There are 85,000 more people working in the automobile plants -- manufacturing plants and assembly plants -- than there were back in 1980.

We're pushing hard for tariff cuts and to lower nontariff trade barriers. And by the way, George, I know, as we've discussed, your keen interest in limiting Japan's tariffs on forest products. Well, we're hoping that very soon we'll have progress to report on that.

But I want you to understand that this administration is on your side and is sensitive to your concerns. I think there's been too long a period in which our government had virtually an adversarial relationship with its own business community. And that doesn't make sense at all as far as we're concerned.

So, I spent a good many years out on the mashed-potato circuit telling people that the only American -- that only American business can give us the jobs and prosperity of the future. And we're going to address that future these next several days in China, and in Washington next month when our U.S. Trade Representative, Bill Brock, meets informally with 13 key Ministers from around the world to see what we can do to raise our collective will to do better.

But now, I think I should go back to listening to you and hearing your concerns and questions.

[At this point, George Taylor, president of the Washington Council on International Trade, made brief remarks. A slide show sponsored by the council was then viewed by the panel. Jack Barrington, president of the Washington State China Relations Council, then made a presentation on trade between the State and China. Following the presentations, George Weyerhaeuser served as moderator of the panel discussion.]

Mr. Weyerhaeuser. Richard Robbins of Robbins Company.

Mr. Robbins. Thank you, Mr. Weyerhaeuser. Mr. President, it's a delight for us to have an opportunity to have this discussion with you. We had a little discussion here, just before you arrived, among a number of the people from the business community. And one of the gentlemen pointed out that his firm spent 5 years cultivating a relationship with the People's Republic of China before they actually converted this into a business opportunity, which became a very important business thing for them. That's been a similar experience with us.

I speak from the perspective of small business, which is somewhat unusual in trade with China. I must say I'd like to compliment the Department of Commerce for the work, particularly, that they have been doing here in the State of Washington with ourselves and with other small businesses, helping us come together and deal as a group with possibilities in China.

We've had a couple of problems which perhaps the government could be helpful in dealing with in developing this trade. We find that when we are in Beijing, for example, trying to do business there, it's very difficult to communicate properly with home office and perhaps even other countries in which we have to communicate. Some facilities could perhaps be made available to us which could be in the form of secretarial services, meeting rooms, Telex, telephones, facts, et cetera, which would make it easier for us to do business.

Another point, which is more a comment than a question -- but you may comment if you'd like -- is that we've found that from the point of view of the small business, it's very difficult to handle the big expenses. With the sales and marketing expenses, it takes years to develop, and particularly in dealing with Chinese delegations that are coming to the United States and other countries in which our people have to travel with them and be with them and in which we are expected to go and attend seminars and training programs in China -- whether the government could provide some kind of funding or aid in some respect that would make it easier for small business to approach that type of expense and develop a business relationship.

The President. Well, both of those points are -- they're both something that I think -- I don't know that we've given as much thought as we should to those -- the communications and so forth. I can only tell you on that, look into that. You know that we have, with regard to small business, particularly, we have started holding some seminars and some meetings with our AID Agency -- Agency of International Development -- to work with small businesses and let them know that -- because the bulk of our foreign aid is spent for American products -- to let them know that there is a potential there for small business in America to participate. So far, it's been rather successful. And I will take these matters up with them, as well as with others, to see if there are some areas here where we can be of help.

I know, when you speak about the communications problems and so forth back and forth, believe it or not, in arranging the Presidential visit to China, we found that there are certain procedures that took a great deal more negotiation than we had expected with regard to our own transportation, communication, and so forth. But everything was worked out very well.

And I just -- from all that you're saying here, I think the potential is so great. The change that has occurred there in, now, their willingness for American investment, their willingness to collaborate with private enterprise, free enterprise, is an amazing change and offers not only a great hope for us but, I think, a great hope for them and their own people.

And the purpose of this meeting is to see that all the doors are as wide open as they can be and what we can do to make some agreements. When the grain deal was mentioned a moment ago, and wheat -- we know that we had a grain deal with them, and in 1983, they failed to buy their quota. They have promised that this will be different in '84, and that they will even make up this slack.

We were in a kind of period of strain there, having to do with textiles and high technology. And fortunately, we've been working that out, too.

Ms. Jacobs. Mr. President -- --

Mr. Weyerhaeuser. Nancy Jacobs -- --

Ms. Jacobs. Thank you.

Mr. Weyerhaeuser. -- -- dean of the University of Washington Business School.

Ms. Jacobs. What implications do you see for the potential for a growing relation between Japan and China for our own trade with the PRC and for our foreign policy?

The President. Oh, I don't think there's any question but that we're going to find Japan a competitor in many areas there. And yet, if we believe in free enterprise, as we do, there's nothing we can do about that. We also have competition right now, here in our own continent, with Canada, and in the very field that we've been talking about -- your field.

But I think that -- and this does not mean that in what we're doing that we're going there with any intention of slackening our efforts in our relationship with Japan -- I think we've made great headway there, also. Prime Minister Nakasone has been most forthcoming and, as I said earlier today, he has some political problems, of course, that have kept him from moving as fast as he might like. I've got some political problems, too, that slowed some things down. But I think that all of this is leading toward a greater development as a market in the People's Republic.

Mr. Weyerhaeuser. I have another question. Mr. [T.A.] Wilson, chairman of Boeing Company.

Mr. Wilson. Mr. President, the United States has had a very good relationship with China in the sale of our aircraft products, not only Boeing Company but also McDonnell Douglas. The point I would like to make with you is that we're in competition now with a consortium in Europe. And I know that President Mitterrand has pleaded their case on his visit to China, and I would hope that you -- and this is in the area of medium-range airplanes -- I would hope that when you're there, you would point out that you would recommend they make their choice on the basis of technical and economic performance and not be swayed by other extraneous factors. [Laughter]

The President. Emblandishments? [Laughter] Let me tell you, I go as something of a salesman, and I'll do everything I can up to the limit of not putting a ``Buy American'' sticker on my bag. [Laughter]

Mr. Wilson. Mr. President, the fact that you would just indicate a knowledge and interest would be most helpful. And incidentally, dealing with those people has been fun, and I think you're going to enjoy yourself.

Mr. Weyerhaeuser. Have another question?

Mr. Lelli. [Philip M. Lelli, president of Tacoma Local 23, International Longshoreman's and Warehousing Union] Mr. President, George Weyerhaeuser's been a good friend of labor in this area, and if you could help him export some of his wood products, it would certainly help the longshoremen in the city of Tacoma. [Laughter]

Mr. Weyerhaeuser. Phil, you and I are in this together. [Laughter]

Q. Right. We're in the same boat with two plugs. [Laughter]

The President. Yes, if one of them pulls one plug, don't make the mistake of thinking you'll get even by pulling the other. [Laughter]

Well, I can assure you that strikes a note that's warm to my heart, too, because I'm the first fellow that's ever held this job who's a lifetime member of a union and was six times president of his own union. So, I have long believed that what the founder of the AFL - CIO said is the truest thing in the world, and that is that labor and management are partners and one can't profit without the other. And he, Samuel Gompers, also said that the greatest sin that management can commit is to not make a profit.

No, I believe that none of us can measure yet what the changes are that are taking place in that great continent with virtually a fourth of the world's population -- the difference in -- as to what it set out to be when it first adopted its ideology, modern ideology. And labor has to be a great consideration in anything that we propose.

You know, one thing we mustn't fall into: When there was talk, also, of protectionism and what its faults can be -- that Smoot-Hawley tariff back in the Great Depression when I was looking for my first job, I remember the effect of that. But I also remember how we cannot see the whole picture.

When I was Governor, driving home one afternoon from the office in the time of one of those several recessions that we had between World War II and the present -- and ahead of me was a car, fellow driving a pickup. And on his bumper he had a bumper sticker -- ``Buy American.'' He was driving a Toyota. [Laughter]

So, I think we're all in this to sink or swim.

Mr. Weyerhaeuser. I've time for one more question.

Q. Mr. Weyerhaeuser, sir.

Mr. Weyerhaeuser. Mr. [Richard] Smith, who's chairman -- or head of the Port of Tacoma.

Mr. Smith. Thank you. Mr. President, this is a rare honor to have you visit our port, certainly, this morning. And I would like to bring up a couple of other, sort of housekeeping items.

We've heard rumors recently, Dick Ford and I, that they were going to cut back in Customs services. And at a time when we are expanding our port export and import businesses rapidly in the Puget Sound and northwest area, this is a very troublesome idea for us to accept, both in the maritime port and, as Dick would tell you, in his excellent international airport. And we have a little rule of thumb that we've worked on out here that says that every dollar spent on augmenting Customs personnel comes back 17 times -- 17 dollars for each one. So, I hope you would be able to persuade the Customs services, sir.

In the meantime, we need to be ready in the port systems. I'm against speaking -- let Dick speak for himself on this -- but all the indications are this vast increase of trade in the Pacific Ocean areas, some as much as 250 percent from some of the national concerns that have been studying this, we in the port system must be ready. It means we've got giant facilities to develop, and fast tracking of permit systems is absolutely essential, sir.

The President. This particular issue has not come before our Cabinet or Cabinet Councils, and so I actually can't comment here on what is back of that move or how they felt that they -- that it would be justified, unless it was an agency that thought that it was overstaffed, and there aren't very many government agencies that volunteer that kind of information. [Laughter] But I can promise you that we will deal with that, and we'll deal with it in a way that we're not going to shoot ourselves in the foot.

Mr. Weyerhaeuser. Unfortunately, we're out of time for the panel questions and comments, and I'd like to call on the President to -- if he would -- to make any concluding remarks.

The President. Well, I wish we could sit around and visit longer and more on this. As I said earlier, I believe in the partnership of government and business and these various things that have been suggested here. I am definitely opposed to protectionism. It has failed whenever it has been tried. And the purpose of these meetings in China is going to be -- again, and with regard to Mr. Weyerhaeuser's business here -- we're going to deal very decisively with regard to certain tariffs. And I, again, realize that this is almost historic, because of the great turn to private investment that we're seeing in the People's Republic and be prepared to deal with that. I don't think that I ever anticipated that I would be going to discuss with them problems of eliminating the danger of dual taxation on our people and their people coming here. But that is going to be one of the subjects that we'll be talking about.

And we just -- we have -- well, I'm scolded by some economists when I say we have a recovery. They have written me, several of them, to tell me to stop using the word recovery. We have passed that point. We are now in a full-blown expansion. And we're going to keep it that way. And we're going to continue doing the things that we think brought this recovery around -- about -- and keep the expansion going without inflation, and my hope is that with a further reduction of the percentage of the gross national product and the peoples' earnings that government is taking for itself, because I think that has been the cause of our economic problems. Government must be taking a smaller share. And we shall continue to work at that.

We'll continue, also, to broaden our markets to encourage export wherever we can. We're not only the biggest buyer and the biggest market in the world for other people's goods, we also can be far more productive and able to compete. And we're going to do everything to get government out of the way to make sure that we have the best means of competing in a world market.

Mr. Weyerhaeuser. Thank you very much, Mr. President. I would say on behalf of all of us, this is a red letter day for the State of Washington. It surely is for Weyerhaeuser Company our pleasure to lease the hall.

It's much more than that. When the President of the United States is both actively informed, fully involved, fully supportive of, and acting as the lead trader for the country, I truly believe it augurs well for this country. I think that we have tremendous opportunities facing the Pacific. And to have a Western President come up here into the Northwest, the leading trading area, and spend time with us and try to listen to some of our ideas and problems is really unique.

I was delighted to have him see some very, very high-quality products on their way to China today. And I can assure you that he is well informed and that we're well served to have him leading the charge for us.

And it's been a pleasure to have you stop by here on your way on a long and arduous trip. And I'd like to thank you on behalf of everybody here and for the Northwest.

The President. Well, thank you very much.

You know, it still sounds strange to my ears to be saying I'm glad to be back in Washington again. [Laughter] And then I have to say, ``but this Washington.'' [Laughter]

Note: The panel discussion began at 12:42 p.m. in the conference room at the Weyerhaeuser corporate headquarters. The President was introduced by Robert Kapp, executive director of the Washington State China Relations Council.

Following the panel discussion, the President left Washington and went to Rancho del Cielo, his ranch near Santa Barbara, CA, where he remained until his departure for Hawaii, Guam, and China on April 22.