Remarks to Business
Leaders at a White House Briefing on International Trade
March 11, 1988
you all very much, and welcome to the White House complex. White House complex
-- that's what they call these buildings. That's because nothing in Washington is ever simple.
we're here to talk about America's strength in
international trade. And seeing each of you -- manufacturers large and small,
people who know about trade not just in theory but in practice, people who
don't hide from a challenge but compete with the best of American ingenuity and
energy -- yes, knowing you and knowing America's working men and women, as
well, I know why today American exports are the highest they've been in the
entire history of the United States of America.
to see the charges that some of our critics throw around, you'd never guess
that we export so much as a paper clip. You've heard their charges: the
deindustrialization of America, the decline of the
middle class, the loss of American jobs. We keep knocking them down with facts.
We hit them with the more than 15 million jobs created since our recovery
began. We keep pounding away at the fact that these are better, higher paying
jobs, as well as that after years on a falling roller coaster the real income
of the average American has risen steadily now for 5 years. We throw at them a
three-punch combination of surging manufacturing exports, the longest peacetime
expansion on history, and the reality that more Americans are at work today
than ever before. And after all this, you'd think they'd stay on the mat and
wait for the bell, slip back into the locker room in shame. But, no, they just
keep coming up with new charges and new demands for a return to old and
discredited policies. You know, this Washington sparring match -- in
one form or another, it's been going on since the day I took office.
it reminds me of a story back in my Hollywood days, happened to be a
fight that took place outside a party that was going on at some Hollywood personality's home. And
the fight was between the late John Huston, the director, and Errol Flynn, the
actor. Now, if any of you remember the shape that Errol was in and John Huston
and his belly, you can guess how the fight went. Two punches and John was flat
on the ground. So, Errol splashed some water on him and helped him up, and John
started hitting him again. Errol decked him again and threw water on him again,
helped him up. And John took a swing again, dropped to the floor. Finally,
Errol doused him with one last bucket of water and, when Huston came around,
leaned over and whispered very kindly, ``John, you have no chance. I was a
professional fighter. Please don't be a fool.'' And you know, as Huston told it
later, he said, ``When Errol said that to me, I knew I had him.'' [Laughter]
today we're here to knock down again some of those fellows that are taking the
wild swings. And the wildest is that American manufacturing and American
workers are losing out in international trade. As Al Smith used to say: ``Let's look at the record.'' Over the past 15 months, the
volume of exports has been growing four times as fast as the volume of imports.
And much of this export surge is in manufacturing exports. Today industry after
industry is finding itself in an export boom. As Business Week magazine
reported recently: ``Basic manufacturers, once considered a dying breed, are
selling products many thought wouldn't even be made in the United States any
longer -- escalators to Taiwan, machine tools to West Germany, lumber to Japan,
shoes to Italy.''
dollar has helped, of course, but what's happening here goes beyond the dollar.
On one hand, since 1980 the United States manufacturing economy
has increased its productivity more than three times as much as in the previous
7 years. The result is that, as one German manufacturing expert put it
recently, the United States is, in his words, ``the best country in the world
in terms of manufacturing costs.'' The other reason for our manufacturing
export boom is, in a single word, entrepreneurship -- smaller businesses that
are growing rapidly and seeking new markets. Since our recovery began,
businesses with 100 or fewer people and businesses that are 5 years old or less
have created most of the new jobs in America. They are also
responsible for many of our exports, like one small furniture manufacturer from
Louis who visited Europe late last year. It was
kind of a busman's holiday. He started looking at European furniture. And he
said, ``I discovered that my products were a lot better and cheaper.'' Now he's
selling tables and chairs to Scandinavia.
of this adds up to one thing. As economics writer Warren Brookes reported
recently: ``One of the best kept secrets in economic circles these days is that
the Reagan administration could end with a bang, not a whimper, as the Nation
makes an apparently successful shift to an export-led economy.'' Well, I'm very
grateful to Mr. Brookes for saying that. Those were his words, not mine. You'd
think this would all be cause for rejoicing here in Washington -- not among our
critics. They've been predicting economic disaster for 5 years. They've waited;
they've been patient. Now they're tired of waiting. Some of the provisions
they've put in the trade bill now before the House-Senate conference would hurt
American jobs, American competitiveness, and the entire American economy.
example, when David Birch, MIT's expert on job creation, asked why the United States has so much more
entrepreneurship and, therefore, so much more job creation than Europe, he found some
straightforward answers. Among these were, as he's written: ``Regulations are
much more onerous in Europe than in the United States, eliminating much of
the flexibility that is the bread and meat for entrepreneurs.'' And to point
out the principal villain, he added: ``Europeans face a host of rules governing
their right to close down facilities, fire workers, and relocate operations . .
.'' So, what does our trade bill include? Well, America's first national rules
restricting a company's right to close down facilities and relocate operations.
example, this week Honda began exporting its first cars from America to Japan. Foreign investment has
helped create new American jobs and American exports. It has contributed to the
rising productivity of American manufacturing that I mentioned earlier. So, what
does the trade bill include? New disclosure requirements that
would dampen and discourage foreign investment from coming into this country.
final example, potentially the most serious: Today over 10 million American
jobs depend on imports, exports, or both. We're continuing a pattern that began
in our first days as a nation. In periods when our total international trade
has expanded, the number of jobs has risen. When trade has fallen, so have
jobs. Since the end of World War II, the expansion of international trade has
been in the framework of the General Agreement on Tariffs and Trade, the GATT.
Not 5 people in 100 can tell you what GATT is, but without it the world would
long ago have fallen back into the cycle of protection and retaliation, every
country for itself -- a cycle that helped to bring on the worldwide Great
Depression of the 1930's.
retaliation provisions could require me and future Presidents to take actions
in direct violation of the GATT. If enacted, they could weaken the
international trading system and could require the President to start trade
wars. It's a bad proposal under any circumstance, but it's particularly bad now
that American exports are soaring and American manufacturers are exporting as
never before and so are vulnerable to retaliation as never before. Yes, too
many backers of the trade bill talk about making America more competitive but
support provisions that would bench some of the best competitors on our team.
They talk about saving jobs, but they want provisions that have the potential
to destroy thousands if not millions of American jobs. They talk about learning
from the Japanese, but why did they have to take their lesson from Kamikaze
mentioned three problems we have with the trade bill. There are
many, many more -- more than there's time to touch on here. But we've listed
them in detail for the conference members and said how strongly we feel. My
veto pen remains ready and available if the final work product of the conference
remains antitrade, anticonsumer, antijobs,
and antigrowth. But my hope, which I believe you share, is that I won't have to
use that pen. The administration is working diligently with the Congress to
avoid that, to get a trade bill that will complement our efforts to promote
trade, exports, jobs, and productivity, not stymie them.
you all know that the House-Senate conference on the trade bill is working away
and plans to finish its job by Easter. While there's much
left to do in this process, it got off to a good, constructive start earlier
this month by throwing overboard many objectionable provisions. We just
hope that the rest of the other 16 subconferences
will follow the example of flagship subconference
number one and that the flagship subconference will
continue on this constructive course. As they continue their work, I would note
that on Tuesday those who had predicted that protectionism would be embraced in
the South were proven wrong. The American people know that putting up walls
around our country is a prescription for ruin, not renewal.
What the world and the United States need now is more trade
and more open trade. And that's why we've pushed for a new GATT round that
includes the most ambitious multilateral trade negotiation agenda in history.
That's why we've negotiated an historic trade agreement with Canada that will expand jobs,
growth, and opportunity on both sides of the border.
Congress considers the Omnibus Trade bill, it can either help or hinder a free
and open trading system. Let me suggest that provisions on the trade bill stick
to five rules. One, that they're GATT legal. Two, that
they not provoke retaliation against our bombing export business -- wait a
minute -- our booming export business -- [laughter] -- or U.S. firms abroad. Three, that they not restrict the flexibility of U.S. business to adjust to
foreign competition. And four, that they not tie the
hands of U.S. negotiators who are
working to open markets abroad. And five, sort of summing it all up, a kind of
golden rule, don't pass any trade law that we wouldn't want another nation to
pass in just the same form, regulating Americans who do business there. The
golden rule -- it's not a bad way to do business, in the home or in the
marketplace, around the world. I hope we can count on the support of each of
you in the next few weeks. Now is not the time to turn out the lights on America's export boom.
before I stop, I thought I'd tell you one final story. In hearing all the
incredible doomsday talk from the critics about our economy and their equally
incredible talk about how they're going to fix things, I couldn't help
remembering an old Hollywood story about Sam Goldwyn and his studio's
advertising office. The advertising director took a poster to Sam promoting
``We Live Again,'' which starred Anna Sten. The
poster read, ``The directorial genius of Mamoulian, the beauty of Sten,
and the producing genius of Goldwyn combined to make the world's greatest
entertainment.'' Goldwyn looked it over solemnly and said, ``That's
the kind of ad I like.'' He said, ``Facts, no exaggeration.'' [Laughter] And
now I can use that word I used before. By the way, the movie bombed. [Laughter]
that's all I have to say except to thank you all for being here and for what
you're doing, and God bless all of you.
Note: The President
spoke at in Room 450 of the OldExecutiveOfficeBuilding.