April 29, 1992 PRESIDENT BUSH ON TRADE +quot;We will work to break down the walls that sto

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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.


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