April 29, 1992 PRESIDENT BUSH ON TRADE +quot;We will work to break down the walls that sto
April 29, 1992
PRESIDENT BUSH ON TRADE
"We will work to break down the walls that stop world trade.
We will work to open markets everywhere....In our major
trade negotiations I will continue pushing to eliminate
tariffs and subsidies that damage America's farmers and
workers. And we'll get more good American jobs within our
own hemisphere through the North American Free Trade
Agreement, and through the Enterprise for the Americas
Initiative".
President George Bush
State of the Union Address
January 28, 1992
Summary
o President Bush is committed to creating jobs and opportunity
in the United States through free and fair trade with the
world. His trade policy is one which will ensure that
foreign markets that are open stay open, and markets that
are closed are made accessible to competitive U.S. exporters
and investors.
o Exports are the engine of economic growth. Since President
Bush took office, U.S. exports have surged, accounting for
almost 70 percent of U.S. economic growth during 1987-90 and
generating an estimated 1.8 million new jobs in export-
related industries.
o To maintain and expand America's impressive export
performance, the Bush Administration is negotiating
multilateral and bilateral agreements to gain further access
to foreign markets and reduce foreign trade barriers.
-- President Bush is committed to achieving a strong GATT
agreement that will open markets worldwide to U.S.
goods and services.
-- The President also is dedicated to obtaining a strong
NAFTA agreement that will ensure U.S. companies access
to the markets of two of our largest trading partners,
Canada and Mexico.
-- A successful NAFTA will further improve prospects for
another of the President's goals, which he announced in
June 1990, trade liberalization under the Enterprise
for the Americas Initiative.
-- At the same time that the President is working in
support of free trade and opening markets abroad, he
also is committed to vigorous enforcement of U.S. laws
to prevent unfair trade practices in the United States.
Free and Fair Trade, not Protectionism, Will Lead U.S. Growth
o There is no question that the United States prospers as
trade barriers fall. For this reason, the President stands
firm in his commitment to building jobs at home by creating
opportunities for American products and services abroad.
o U.S. goods and services still face many barriers around the
world, from prohibitive licensing requirements to collusive
corporate business practices to inadequate protection of our
copyrighted films and patented pharmaceuticals. The
President is committed to negotiations which reduce these
barriers.
o Access to foreign markets must be maintained and expanded
lest exports -- this vital engine of growth -- sputter or
stall. Those who advocate closing the U.S. market to
balance our trade are courting isolationism and economic
decline, not growth. Protectionist policies would take us
back to the dark days of Smoot-Hawley, which worsened the
Great Depression of the 1930s. In the broad sweep of
history, rising prosperity and rising international trade
have gone hand in hand. More than ever, we need the
billions of dollars a year of economic stimulus that an open
world trading system and access to foreign markets provide.
Growth in U.S. Exports
o President Bush's efforts to open world markets and promote
U.S. exports have strengthened America's role as leader of
the world economy, increased American jobs, and revitalized
the American economy.
U.S. Leads World in Exports:
o In 1991, America regained its title as the world's leading
exporter of goods, ahead of Germany and Japan. U.S.
merchandise exports reached $422 billion, while Germany's
exports fell 3.4 percent to $378.3 billion.
Export Growth:
o U.S. merchandise exports in 1991 surged to an all-time high
of nearly $422 billion, a $28 billion increase from 1990's
record high of $394 billion. Since 1988, merchandise
exports have grown $100 billion, an increase of 31 percent.
o Export growth has not been confined to a single sector.
Since 1988, exports of consumer goods are up 55 percent;
exports of capital goods are up 40 percent; and exports of
industrial supplies are up 27 percent.
o U.S. fiber, textile, and apparel exports have grown nearly
10 percent in the past year, from $11 billion in 1990 to
$12 billion in 1991. Exports of apparel alone increased
nearly 30 percent during this same period.
o Exports of U.S. advanced technology products have increased
over 20 percent between 1989 and 1991, from $83.5 to $99.9
billion.
Job Creation:
o The dramatic increase in merchandise exports has created
U.S. jobs and strengthened the U.S. economy.
o Export growth accounted for more than 25 percent of the
growth in private industry jobs in the United States between
1986 and 1990.
o Over 69 percent of U.S. economic growth between 1988 and
1990 has come from expanding merchandise exports to foreign
markets.
Trade Deficit:
o Since President Bush took office, the U.S. trade deficit has
declined dramatically. Between 1988 and 1991, the
merchandise trade deficit fell almost 44 percent, from $119
billion to $66 billion.
o Even though we still run a trade deficit with Japan, the
U.S. had a trade surplus with the EC of $16.7 billion in
1991, a significant turnaround from the trade deficit with
the EC a few years ago.
o The February 1992 trade deficit of $3.4 billion is the
lowest monthly deficit in nine years.
Reducing Barriers and Opening Markets -- Accomplishments
o The Bush Administration has used U.S. trade laws and other
avenues to open markets abroad and to stop numerous unfair
trade practices. Some examples follow:
U.S.-Canada Free Trade Agreement:
o The President has overseen the successful implementation of
the U.S.-Canada Free Trade Agreement. The lowering of
tariffs and trade barriers between the United States and
Canada has substantially increased business for U.S.
industries.
o Since implementation of the U.S.-Canada Free Trade Agreement
on January 1, 1989, U.S. merchandise exports to Canada have
risen by 19 percent to $85 billion in 1991.
Japan:
o One of the President's top trade priorities is to increase
access of American exports and investors to Japan, the
world's second largest industrial economy. The U.S.
merchandise trade deficit with Japan has fallen from $52
billion in 1988 to $43 billion in 1991. Since President
Bush took office in 1989, the Administration and Japan have
concluded trade agreements on satellites, supercomputers,
wood products, third party radio, cellular telephones,
telecommunications terminal equipment, amorphous metals,
international value-added network services, computers,
paper, semiconductors, construction services.
o Between 1988 and 1991, total U.S. merchandise exports to
Japan grew over 28 percent, from $37.7 to $48.1 billion.
The growth in export sales of manufactured products has been
even more dramatic -- up 42 percent between 1988 and 1991,
from $21.7 to $30.8 billion.
o U.S. advanced technology exports to Japan have skyrocketed
in the past five years. Between 1985 and 1990,
telecommunications exports have climbed 414 percent,
semiconductor exports have increased 334 percent, and
exports of medical instruments have increased 156 percent.
o The President's trip to Japan in January 1992 resulted in a
number of important agreements and commitments from the
Japanese, including significant market-opening measures in
glass and auto parts, and government-to-government
agreements covering the computer and paper sectors. The
President also resolved 49 issues pertaining to standards,
certifications, and testing -- all issues cited by U.S.
companies as barriers to doing business in Japan.
o As a result of President Bush's trip, Japanese purchases of
U.S. auto parts are expected to more than double in the next
two years, from $9 billion to about $19 billion by 1994.
Significantly, Japanese companies manufacturing in the U.S.
pledged to increase the local content of their vehicles to
70% by 1994.
o President Bush is committed to building upon the commitments
made by Japan to strengthen and expand the Structural
Impediments Initiative (SII), which provides a comprehensive
approach to the opening of the Japanese market.
Eastern Europe:
o The Bush Administration and Eastern European nations have
concluded trade, investment, and intellectual property
agreements which will help stabilize the economies of these
emerging democracies and promote economic opportunities for
U.S. exporters and investors.
o Since 1988, U.S. merchandise exports to Eastern Europe
(including the former USSR) have increased 35 percent, from
under $4 billion to almost $5 billion.
o In order to expand and protect U.S. investments in these
markets, President Bush has signed bilateral investment
treaties (BITs) with Czechoslovakia and Poland.
Initiatives in Support of Free Trade
o To maintain and expand America's impressive export
performance, the Bush Administration has for the past three
years deployed a two-pronged trade strategy to open markets,
by:
-- Working to achieve a successful conclusion of the
Uruguay Round of global trade talks, held under the
auspices of the General Agreement on Tariffs and Trade
(GATT); and
-- Launching broad-based, market-opening negotiations with
our key trading partners.
General Agreement on Tariffs and Trade (GATT):
o In the current Uruguay Round of talks, U.S. negotiators are
working on behalf of American businesses and farmers to
improve the international business environment for
agricultural products, textiles, trade in services and
foreign investment, as well as to achieve greater protection
for intellectual property.
o A successful GATT negotiation will increase U.S. GNP by over
$1 trillion over the next ten years.
North American Free Trade Agreement (NAFTA):
o President Bush initiated trilateral negotiations with
Canada, our largest trading partner, and Mexico, our third
largest trading partner, to establish one of the biggest and
richest markets in the world with a combined 365 million
producers and consumers, and over $6 trillion in annual
output. A NAFTA will reduce existing barriers to open trade
and create hundreds of thousands of new export-related US
jobs.
o A successful NAFTA will allow American exporters to build on
their earlier successes in Canada and Mexico. U.S.
merchandise exports to Mexico and Canada have more than
doubled since 1980, rising from $51 to $118 billion.
o Already, we have seen the benefits of liberalizing trade
with Mexico. Since 1986, when Mexico joined the GATT and
reduced its tariffs from as high as 100 percent to a high of
20 percent, U.S. merchandise exports to Mexico have almost
tripled from $12 to $33 billion. U.S. exports to Mexico
support a large and growing number of U.S. jobs, reaching
538,000 as recently as 1990. The U.S. will profit even more
from further tariff reductions under a NAFTA.
o A NAFTA will assist Mexico's efforts to raise its
environmental and labor standards.
o To ensure U.S. industries are given sufficient time to
adjust to the market conditions of a new free trade area, a
NAFTA will contain a phase-out period for the reduction of
certain U.S. tariffs and trade barriers.
Enterprise for the Americas Initiative (EAI):
o In June 1990, the President announced his vision of a
"Hemispheric Free Trade Zone" stretching from Alaska to
Argentina, bringing the Americas together through trade and
prosperity. Since then, the Bush Administration has
concluded bilateral and multilateral trade and investment
framework agreements with 31 of our neighbors.
o The EAI is designed to encourage the dramatic transformation
of Latin America and the Caribbean toward market oriented
economic reform, free trade, and a greater role for private
enterprise.
o A successful EAI will provide greater access to foreign
markets for American manufacturers and farmers, provide
American businesses with increased trade and investment
opportunities, and promote environmental protection.
o Between 1986 and 1990, total U.S. merchandise exports to the
region (excluding Mexico) have grown from $31 to $53
billion.
o On November 14, 1991, the Bush Administration signed a
Bilateral Investment Treaty with Argentina (the first that
the U.S. has concluded with a South American country) that
will serve as a model for the rest of Latin America.
Argentina committed to removing restrictions on investment,
and to substantially improving legal protections for the
current $3 billion (and future) U.S. investments in
Argentina.
E-Mail Fredric L. Rice / The Skeptic Tank