Free, fair trade urged by Clinton President asks Japan, Germany to aid global growth

February 27, 1993|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau

WASHINGTON -- Setting out an "agenda for American action" in the global economy, President Clinton endorsed a tough, free-but-fair trade policy yesterday and called on Japan and Germany to join the U.S. as "engines" of worldwide recovery.

For the first time since he became president, Mr. Clinton outlined his international economic policy and rejected protectionism.

"In the face of all the pressures to do the reverse, we must compete, not retreat," Mr. Clinton said.

In an effort to reassure American workers who fear loss of jobs to cheap foreign labor, he said that open and competitive global commerce would "enrich us as a nation," and pointed out that each $1 billion in exports created 20,000 U.S. manufacturing jobs.

Casting the United States as weaver of a "new fabric of commerce" that would help spread democracy and freedom around the world, the president emphasized the need to help Russia and other emerging democracies, linked growing trade with China to improvement in human rights there and promised more open markets for the developing world.

"We must channel the changes now engulfing our world toward America's enduring objectives of peace and prosperity, or democracy and human dignity," he said. "If we could make a garden of democracy and prosperity and free enterprise in every part of this globe, the world would be a safer and better place."

The nation, he said, was "at the third great moment of decision in the 20th century." Would it repeat the mistakes of the 1920s and 1930s and turn inward? Or would it strive for the success of the 1950s and 1960s by reaching out?

"If we set a new direction at home, we can set a new direction for the world as well," he said in a speech at American University, a forum President John F. Kennedy chose to define the imperative of pursuing peace despite the Cold War.

Mr. Clinton used the occasion to outline how America should adapt to the new challenges of the post-Cold War period, when "democracy is on the march everywhere," and the commercial competition is global.

He committed his administration to the general free-trade priorities set by the Bush and Reagan administrations but left no room to doubt he would be tougher on unfair competition.

"It will not be a policy of blame, but one of responsibility. It will say to our trading partners that we value their business, but none of us should expect something for nothing," he said, warning that his administration would enforce trade laws and agreements "with all the tools and energy at our disposal."

He endorsed speedy completion of the Uruguay Round of free-trade talks, the ratification of an improved North American Free Trade Agreement with Canada and Mexico, and the prospect of stronger trade relations with the Pacific nations.

He was toughest on the world's competing industrial powers. While 60 developing nations had reduced their trade barriers over recent years, 20 of 24 industrial nations had increased theirs, he said, adding: "Cooperation among major powers for world growth is not working well at all today."

This blunt message will be carried by Treasury Secretary Lloyd Bentsen and Federal Reserve Chairman Alan Greenspan to finance ministers and central bankers of the seven leading industrial nations at a meeting in London today.

Mr. Clinton said the other major industrial nations had been pressing the United States to reduce its debt load and improve the education and training of its work force. His new economic program would achieve that, he said.

If Congress passed his package, he would tell leaders of the Group of Seven industrial nations at a summit in Tokyo in July: "We have done it. We have done it for ourselves. We have done it for you. Now you must work with us in Germany and Japan and other nations to promote global growth."

The United States has been pressing both Germany and Japan for months to stimulate their economies, and Mr. Clinton sounded the familiar theme saying: "Our major partners must work harder and more closely with us to reduce interest rates, stimulate investment, reduce structural barriers to trade and to restore robust global growth."

Noting that world growth depended on U.S. economic recovery, Mr. Clinton added: "The fact is that the world can't grow if America is in recession, and it will be difficult for us to grow . . . unless we can spark a new round of recovery in Europe and Japan. We have got to try to work more closely."

Turning to China, Mr. Clinton said U.S. purchases were helping the Chinese economy grow at 10 percent a year, but warned: "We have a right to expect progress in human rights and democracy as we support that [economic] progress."

Widening his horizon further, Mr. Clinton called for the steady expansion of trade with developing nations, which provide a rapidly expanding market for U.S. goods, and are crucial to protecting the global environment and stemming the flow of illegal drugs.

"These efforts will reap us dividends of trade, of friendship and peace," he said.

The "perils" facing Russia and the other emerging democracies were "specially acute and important" to U.S. interests, Mr. Clinton said.

The world would suffer, he said, if the economic reforms of Russian President Boris N. Yeltsin were abandoned or if hyper-inflation took hold and millions of Russians decided they had no alternative but to emigrate.

He painted a nightmare scenario of Russian "Chernobyl-style" nuclear power stations operating without spare parts instead of being phased out and closed down safely.

"If we were willing to spend trillions of dollars to ensure communism's defeat in the Cold War, surely we should be willing to spend a tiny fraction of that to ensure democracy's success where communism failed," he said, drawing applause from his audience as he went on to propose "carefully targeted assistance," conditioned on reform.

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