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Published every Monday by the Office of the Federal Register,
National Archives and Records Administration, Washington, DC
20408, the Weekly Compilation of Presidential Documents con-
tains statements, messages, and other Presidential materials re-
leased by the White House during the preceding week.

The Weekly Compilation of Presidential Documents is pub-
lished pursuant to the authority contained in the Federal Register
Act (49 Stat. 500, as amended; 44 U.S.C. Ch. 15), under regula-

tions prescribed by the Administrative Committee of the Federal

Register, approved by the President (37 FR 23607; 1 CFR Part

10).

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Week Ending Friday, April 1, 1988

Radio Address to the Nation on SovietUnited States Relations and the Trade Bill

March 26, 1988

My fellow Americans:

This week, as our thoughts begin to turn toward Easter, the cause of peace among nations is foremost in our minds, a cause that was also at the top of our work agenda here in Washington as I received Soviet Foreign Minister Shevardnadze at the White House. My talks with him were cordial but, as you might expect, to the point.

During Mr. Shevardnadze's stay, I announced May 29th through June 2d as the dates for my summit meeting in Moscow with the leader of the Soviet Union, General Secretary Gorbachev. And of course, this was good news. The last U.S.-Soviet summit in the U.S.S.R. was 14 years ago, so this meeting will give me and, in a sense, you, the American people, an opportunity to convey the message of peace and freedom to the Soviet people. But let me also say that while lengthy talks held between Secretary Shultz and Mr. Shevardnadze at the State Department were useful, they also made clear how difficult the issues are between the United States and the Soviet Union. Now, some progress was made here and there in various areas, but there's much more that needs to be done, given the importance of the topics discussed. Our agenda with the Soviet Union deals not only with arms reduction but also regional matters, human rights, and people-to-people exchanges. And as our discussions continue in each of these areas, I can assure you that the United States will sign only those agreements that are in our best interest. Let me also assure you, as negotiations continue on efforts to further reduce United States and Soviet strategic nuclear arms, that my administration will carefully review such proposals. Still, we've come a long way in our attempts to deal with the Soviets and to further the cause of peace and freedom

around the world. The next summit will help. How much, we'll have to see.

An important accomplishment of the first few summits, however, will be before the United States Senate Foreign Relations Committee next week for approval; this is the INF treaty on Intermediate-Range Nuclear Forces that Mr. Gorbachev and I signed when he was here for the Washington summit last December. It's an important vote, and I'm hopeful the Senate will, as it exercises its constitutional duty, speedily approve what amounts to the first real nuclear arms reductions ever achieved.

Now, some of you've heard me say before that our progress with the Soviets is based on their awareness that we have no illusions about them and on our determination to deal from a position of strength. Now, that strength means, of course, keeping our defenses ready and second to none; but it also means a strong and vigorous economy and a place for America as the world leader in trade. That's why the other matter that is being considered in the Congress is of critical importance; that is the legislative conference on trade legislation. Last year, there was trade legislation coming through the Congress that would have meant serious risks to America's prosperity and indeed the world's. Fortunately, working with our administration, Congress has made some progress in producing a sounder bit of legislation. However, the legislation now before a conference committee still contains provisions that would restrict trade, deter investment in the United States, require mandatory retaliation that invites trade wars, and unnecessarily hamper my prerogatives as President. For example, one proposal still very much alive would create an obligation for the Government to help each and every company that can't keep up with legal, totally fair imports-in effect an entitlement program for businesses that can't compete. So, my hope is that the Congress will stay on course and that we will settle on a bill that avoids the great danger of choking off

international trade and slowing down economic growth. I will not sign a bill that imperils our economy and threatens growth.

And by the way, that economic growth keeps coming right along. Only this week we heard that the gross national product growth for last year was 4 percent. Now, this was higher than our own expectations— expectations that, by the way, were criticized as too rosy a scenario when we first made them. Well, the rosy scenario was even rosier than the one the critics were down on. It just shows what can happen when spending and taxes are held down and trade is encouraged. In fact, right now much of our economy is being driven by the growth in exports that bad trade legislation would discourage.

So, you can see there's much on our minds this week in Washington. And before anyone looks prematurely forward to the arrival of the Easter Bunny, I hope Congress will stay focused on the important matters this week: the INF treaty and trade legislation.

Until next week, thanks for listening, and God bless you.

Note: The President spoke at 12:06 p.m. from the Oval Office at the White House.

Remarks to the Employees of the Reynolds Metals Company in Richmond, Virginia

March 28, 1988

Thank you all very much, and thank you Bill Bourke, for that kind introduction. And thanks to Chairman Reynolds for hosting this event, and thank you all very much. And I'd like to say hello, too, to your Senator John Warner, who is down there, and your Congressman Bliley. I've already said hello to them because I brought one of them with me. [Laughter] But this has all been fascinating, and there's much that I want to say because I think I've seen a magic show already today. [Laughter] But I realize I'm only one of several speakers in this forum, so as Henry the Eighth said to

each of his six wives, "I won't keep you long." [Laughter]

Today, in my tour of your plant, I saw an example of why American exports are the highest they've been in the entire history of the United States of America. It's called American free enterprise. Today it's increasingly becoming a high technology operation. And I just wish that all of the negativists who talk about the decline of America or say that we can't compete overseasI wish they'd come to this plant and take a look. It might open their eyes.

America is now in the 64th straight month of economic expansion. That's the longest peacetime expansion in our nation's history, beating out the previous record by 6 months already. And we're still going strong. Gross national product rose nearly 5 percent this quarter and a strong 4 percent for the whole of 1987. Such growth in the fifth year of an expansion probably also belongs in the record books. But I don't think one of those 64 months has gone by without some expert or some politician predicting imminent disaster. Sometimes we'll be lucky and escape only with a recession; sometime it's another Great Depression, according to the so-called experts. I'm sorry, but it seems to me that these people are out of touch. During the Great Depression the prediction that "prosperity is just around the corner" became a point of ridicule. The reverse is true today. We've heard during the longest, strongest expansion in our history that "calamity is just around the corner.

It's a little like that old story of the traveling salesman who was having kind of a rough day of it and finally gave up and dropped into a local diner and wearily ordered a cup of coffee and couple of eggs and a few kind words. And the waitress brought the order, put down the eggs, and put down the coffee, and said, "Will there be anything else?" Well, he said, "What about the kind words?” She said, “Don't eat them eggs." [Laughter]

Our administration has no higher priority than the protection of America's economic security. For nearly 8 years, we've fought for policies that have enhanced that security. I'll match our program of low taxes, free and fair trade, reduced increases in govern

ment spending, and reductions of Federal regulations against our opponents' calls for more protectionism, higher taxes, and big government spending programs any day of the week. I suspect you'll be hearing more about these two approaches in the months ahead. But the fact is you have to give our critics credit. They're running perhaps the greatest mythmaking operation in history. The myths keep evolving as they encounter contrary evidence, but the mythmakers don't give up. The three big ones today are the deindustrialization of America, the decline of the middle class, and the loss of American jobs.

The reality, of course, is over 151⁄2 million new jobs created since the recovery began, and reversing the trend of the late seventies, these new jobs are bigger and better and higher paying jobs. The reality is that after years of high inflation in which the American people saw their buying power shrink beyond recognition the real income of the average American has been rising steadily for 5 years. The reality is that manufacturing exports are surging, and manufacturing productivity is at an all-time high and rising rapidly. Since 1980 the United States manufacturing economy has inceased its productivity almost three times as much as in the previous 7 years. One German manufacturing expert put it succinctly: The U.S., he said, is simply "the best country in the world in terms of manufacturing costs." And the economist Warren Brookes predicted that we will make the shift to an exportled economy, said that '88 "could end with a bang."

Now, you'd think this would all be cause for rejoicing in Washington-not among our critics. They've been predicting economic disaster for 5 years. They've waited. They've been patient. And now they've seized their opportunity. They've got a trade bill before Congress that could squelch productivity, destroy American competitiveness, and make all their doomsday myths a reality. In an apparent attempt to import Euro-malaise, they've written in European-style regulations that would create America's first national rules restricting a company's right to close down facilities and relocate operations. Another example: Honda recently 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 do some in Congress propose including in the trade bill-new disclosure requirements that would dampen and discourage foreign investment from coming into this country. But potentially the most serious are mandatory retaliation or automatic protection provisions that could require me and future Presidents to take actions that would be in direct violation of the GATT and seriously harmful to the national interest. 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.

And, yes, too many talk about making America more competitive, but support provisions in the trade bill 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 pilots? [Laughter]

You may have been reading lately that the trade bill is making good progress, that a lot of protectionist provisions have been jettisoned. Well, there is some truth to that, but there's a long way to go before the legislation does more good than harm to the U.S. economy. Now, I'll veto if I must. Only wholesale elimination of the objectionable provisions will produce a bill that I can sign. I won't let them destroy the American growth economy. But I'd rather work with Members of Congress to bring about not just an acceptable bill but one that genuinely improves upon our current law. There are any number of positive things that can be accomplished: renewed negotiating authority so that we can continue to produce compacts like the historic Canada free trade agreement that is so important and that Bill Bourke mentioned. We've advocated a new program that would provide training to

workers who are displaced as our economy becomes more competitive. And there are many reforms to existing U.S. laws, such as protection of patents and copyrights and streamlining export controls that would enhance our ability to export. As they continue their work in Congress on this bill, I would note that on Super Tuesday those who had predicted that protectionism would be embraced in the South were proven wrong.

I've often talked about Senator Reed Smoot and Representative Willis Hawley and the bill they coauthored that brought about the collapse of the world trading system and helped send America into the decline of the Great Depression-the Smoot-Hawley tariff. Well, both of them felt that a bit of demagoging about trade was good politics. It certainly did get them in the history books. And what many people don't realize is that they were both thrown out of office 2 years later when the voters had time to see the effects of their bill. Protectionism isn't just bad economics, it's bad politics. I think the American people have decided that one Great Depression is enough, and they aren't going to give the trade demagogues a second chance. History points in the opposite direction: more trade, not less; increasing cooperation, not isolationism and retaliation; expanding global networks of investment, production, and communication, not mercantilist national economics shrinking behind tariff barriers. And that's why we've pushed for a new GATT round, which has now been launched to negotiate the most ambitious multinational trade agenda in history. This took some doing at the economic summits that we hold each year with several of our trading partners, and why, as was mentioned earlier, we've negotiated an historic trade agreement with Canada that will expand jobs, growth, and opportunity, as you've been told, on both sides of the border.

The transformation of Reynolds Aluminum that we saw here today is part of a larger picture. The world economy is in the midst of a profound transformation. It's been called the Information Age, the Computer Age, the Technological Revolution. America can either accept the challenge, as you here at Reynolds have done, or we can

opt out of competition and, therefore, miss out on the new horizons opening before us. Let me just end by giving one example that shows just how profound that transformation is. The driving force of the Technological Revolution is the almost daily revolution in semiconductor technology. Now, to give an idea of the change our generation has wrought, one scientist has made this comparison: If automotive technology had progressed as fast and as far as semiconductor technology has in the last 20 years, he says, a Rolls Royce today would cost less than $3; it would get 3 million miles to the gallon; it would deliver enough horsepower to drive an ocean liner; and six of them would fit on the head of a pin. [Laughter] This is more than simply a productivity explosion. Operating in the mysterious realm of quantum physics, today's computers signal a quantum leap into a new world

economy.

Reynolds has put that quantum power to work for it, and to work for U.S. competitiveness. America is still the leader in innovation and entrepreneurial drive. And if we're willing to compete, I have no doubt we'll be the ones leading the way into the new century and the new world economy. And, Bill, when I was listening to you a moment ago, I want to tell you, this is what we're up to with our trading allies in the world, and we want to bring about that very thing you mentioned with regard to our ability to compete on a fair and level playing field, and that's what we're going to keep driving for until we get it-all the

way.

You know, lately, I've got a new hobby, and it's kind of made me stick around longer than I should when I'm speaking. [Laughter] I've been collecting stories that are told in the Soviet Union by their people, among themselves, which reveal they've got a great sense of humor, but they've also got a pretty cynical attitude toward their system. And I told this oneBill, you'll have to hear it again—I told it in the car. I didn't tell this one to Gorbachev. [Laughter] You know, there's a 10-year delay in the Soviet Union of delivery of an automobile. And only 1 out of 7 families in the Soviet Union own automobiles. It's a 10year wait. And you go through quite a proc

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