Remarks on Free and Fair Trade to Members of the United States Information Agency Volunteer International Council

 

June 17, 1988

 

Thank you all very much, and welcome back to the White House. I would like to begin by thanking Charlie Wick for bringing you all together today. As many of you know, Charlie has served as Director of the USIA longer than any other Director in our history. And Charlie's been not only a trusted adviser but a good personal friend. Thank you, Charlie.

 

Well, it's my job just now to say a few words. But whenever I'm asked to speak after lunch, there's a certain story that comes to mind. It dates back to ancient Rome. And on Sunday afternoon, there was going to be a feeding of the hungry lions. And a little cluster of Christians were going to be brought out into the Colosseum, and the lions turned loose. And there they were, huddled there, and in came the lions roaring toward them. And one man stepped out of the little group and said a few quiet words, and the lions just laid down. Well, the crowd was furious. And Caesar sent for the man, and they brought the man before him. And he said, ``What did you say that made the lions act like that?'' He said, ``I just told them that after they ate there would be speeches.'' [Laughter] So, with your permission, I'll keep these remarks brief.

 

As you know, I'll be leaving on Sunday for Toronto to attend the 14th annual economic summit. These annual meetings of the leaders of the major industrial democracies have proven invaluable in setting broad policy guidelines. And I can't resist pointing out that when I attended my first economic summit in 1981 my views on the need to strengthen free markets were not exactly popular. Today things have changed. Statism and socialism are now on the defensive, even in the Communist world. There's global understanding that, yes, the free market is the engine of economic growth.

 

World trade will, of course, represent a topic of central concern at the Toronto summit, and so I thought I'd share with you some of my thoughts about the international economy. First, underlying principles -- listen, if you will, to these words written by Thomas Jefferson: ``Our interest will be to throw open the door of commerce and to knock off all its shackles, giving perfect freedom to all persons for the vent of whatever they may choose to bring into our ports, and asking the same in theirs.'' In short, protectionism in any country does damage to all. And so, the goal of the administration has been to open the markets of other countries, not to close America's markets.

 

Yes, the news this week of continued improvement in the American trade deficit is encouraging and welcome. But consider what the trade deficit arose from: the unparalleled American economic expansion, now in its sixth year; and the openness of the American market to foreign exports. These two factors have generated export-led economic growth in Europe, Japan, and in the Third World. To cite but one example, in the past year the United States absorbed roughly two-thirds of Mexico's total exports. Other developing nations are likewise dependent on exports to America for their economic growth. But to be able to import, Americans must be able to export. So, it damages the entire world economy when foreign countries fail to offer the same opportunities to American exports that America offers to their products. It's this basic sense of fairness that has helped generate protectionist pressures in America. And let me repeat: Protectionism, the closing of America's markets, is the wrong response. Opening markets -- that, I firmly believe -- is the answer.

 

So, our administration, working with Congress, eliminated many, but not all, of the protectionist measures from the recent omnibus trade bill. And I'm looking forward to signing an improved version of this bill as soon as Congress sends me a bill that will strengthen America's international competitiveness and create even more new jobs for Americans. One of the central components of this bill, and this is crucial, is negotiating authority that will allow us to forcefully pursue open markets everywhere. After all, that was the original intent of the framers of the General Agreement on Tariffs and Trade 40 years ago.

 

The United States has played a leading role in opening this new round of international trade negotiations -- the Uruguay round, agreed upon at Punta del Este, Uruguay, in September 1986. These negotiations will build on the achievements of previous trade rounds and provide a much-needed framework for expanding trade in services, investment, and intellectual property. And they will also focus on the crisis in world agricultural trade.

 

Now, I don't want to say a great deal about this matter of the world agricultural trade crisis. You'll be hearing a great deal about it as the negotiations progress this year. But there's a simple rule that's as true in agriculture as in any other endeavor: When you tax something, you get less of it, and when you subsidize something, you get more of it. It so happens that this year the world's industrialized nations are subsidizing agriculture to the tune of $200 billion a year. Is it any wonder there are world surpluses of so many crops or that so many markets for agricultural goods have become so distorted? Our position on this is simple: By the year 2000, all subsidies and market barriers that distort trade in agriculture should be eliminated -- all of them. Is that a tall order? You bet. But we've filled tall orders before. In fact, the European press has given our position on agricultural subsidies a nickname that sort of appeals to me. They've started calling it the zero option. [Laughter]

 

I've enjoyed economics ever since I started studying it during my college days. And, no, it's not true that I was able to tell you the story of the prisoners and the lions because I was an eyewitness. [Laughter] But there's one quotation about world trade that I especially cherish. It comes from the 18th century French economist Frederic Bastiat, who wrote that protectionism ``is the sacrifice of the consumer to the producer, of the end to the means.'' And I guess that's what a belief in free trade comes down to: keeping the ends in view. The ends of continued world growth, that the lives of individuals -- of men and women and children -- might become even better. Those are the ends that brought me to this high office, and those are the ends I'll continue to fight for until the very day I leave this grand old house.

 

I appreciate the personal commitment that each of you has made to be a part of the USIA International Council. Through you, the business and opinion leaders of the world, we are better able to understand international perceptions of our country and directly communicate our message. And again, I thank you all, and thank you for being here, and God bless you all. You'll forgive us, but we've got to get back to work.

 

Note: The President spoke at 2:01 p.m. following a luncheon in the East Room at the White House. The Council examined overseas perceptions of U.S. leadership in world affairs and ways the United States could improve its image abroad.