THE WHITE HOUSE
Office of the Press Secretary
REMARKS BY THE PRESIDENT AT NAFTA PRODUCTS EVENT
The South Grounds
10.31 A.M. EDT
THE PRESIDENT: Thank you very much. I want to thank Harold and Bob and, of course, Lee Iacocca, who has been such an eloquent spokesperson for NAFTA. It's nice to see him on television in an ad where he's -- I enjoy watching him sell Chryslers, but I like seeing him sell NAFTA even more in the television ads. (Laughter.)
I want to thank the many members of the United States Congress who are here today. They hold the fate of this trade agreement and, in many ways, the fate of America's trade future in their hands. I want to thank the members of the Cabinet here today -- the Treasury Secretary Lloyd Bentsen; our United States Trade Ambassador Mickey Kantor, who negotiated the agreements on the environment, on labor standards, and some other things which make this a truly unique trade agreement in the history of world trade; the Labor Secretary; the Education Secretary; the Commerce Secretary. Bob Reich, Dick Riley, and Ron Brown -- I've seen all of them. There may be other members of the Cabinet here today showing our unified support for this agreement.
I also want to thank all the companies and the workers who came here today. They really showed what this trade agreement is all about. It's about the jobs of American workers and the future of American working families. People who are determined to compete and win.
Today, the demonstrations in these two tents should show our country and show our Congress why we need NAFTA. In the next month before the vote we've got to vigorously make this case to the American people.
I was talking with Bob and the other steel workers over at their exhibit over here, and I said, You know, we figure that an enormous number of America's unions will actually pick up jobs if this agreement passes."
The NAFTA fight is an interesting one to me. Lee Iacocca has already said it pretty well, but I have to restate it for you in personal terms. Before I became President, I was a Governor of my state for a dozen years -- during the 1980s. When I took office in 1983, our unemployment rate was three percentage points above the national average. I know all about losing jobs to trade, to not being able to compete. A lot of companies here have plants in my state, and I believe that everyone I saw here, I have personally been in the plant.
I saw companies shut down and move to Mexico in the 1980s. And when it happened, because I live in a small state, I knew who they were. I'm proud to say we brought one of them back, too, before I left office. I would not ever do anything knowingly that would cost jobs to the American economy and take opportunities from American working people.
This won't do that; it will do the reverse. The people who are fighting this are bringing to this fight the resentments that they have over what happened in the 1980s. You heard me talk about it -- how many decent people lost their jobs; how many times did we see people shut down and move to other countries solely because of lower labor costs or higher other production costs in America. That's what happened before. But in the last 12 or 13 years we have seen productivity growth in the production sector in the United States go up at four percent or more a year.
You heard Lee say that you can now produce an automobile from anywhere in this part of the world cheaper in the United States than anyplace else. We had two European companies put plants in North America -- they could have gone to Mexico. Where did they go? One went to South Carolina, one is now going to Alabama. Why? Because it's cheaper. Because the labor is highly productive, even though more expensive, and that is a relatively small part of a big, complex operation -- making an automobile and putting it into a showroom.
And I tell you, friends, if we can get folks in this country to focus on what this trade agreement does, it will alleviate the anxieties that so many people have in the 1980s. It raises the cost of production to Mexico by requiring greater investments in labor and in the environment. It lowers the trade barriers. On automobiles alone, the domestic content requirement will be lowered, and we'll be able to go from selling one to 50,000 American cars in one year alone.
It will give us access to a Mexican market on preferential terms as compared with our Japanese and our European competitors, something that we have seen on the reverse side not only in Europe, but especially in Asia. And it will create good jobs. We'll not only get more jobs out of this, but the jobs we get related to exports pay on average about 17 percent more than non-export related jobs in this country.
And look at the Mexicans. You know, frankly, I'm getting a little weary of hearing people criticize Mexico as not perfect. You think everybody else we trade with in the world is perfect? Look at the progress they have made. It's hard to show a country that's made a stronger commitment to open markets and a free enterprise system, coming from a long way back.
In most of my lifetime, if you want to be a popular politician in Mexico, the way to be popular was to badmouth the United States, blame all of the problems of the people on the United States. The last two presidents of Mexico have started to turn that around. This President said we're going to compete in the global economy. And we're going to try to have open relationships. And we're going to start with the United States. And, unilaterally, they have lowered a lot of their tariffs, even though they're still 2.5 times as high as ours. And now we've got the trade surplus that Lee Iacocca talked about.
We can do so much better if we adopt this agreement. And we give ourselves a chance to compete in a friendly way with a country that now likes the United States, wants to be tied to the United States, full of 80 million people who spend 70 percent of the money they spend on foreign products in the United States of America. It is a pretty good deal, and it's time we started to take it. (Applause.)
I also want to talk about -- we believe that this agreement will create 200,000 new jobs by 1995 alone. Keep in mind, as has already been said, the Mexican economy today is only about 1/20 the size of the American economy. It's about the size of the economy of California from Los Angeles County to the Mexican border. And, already, these folks are accounting for a $6-billion trade surplus.
Imagine what would happen to the American economy as the Mexican economy grows, as the people there have their incomes go up, as they have more money to spend, and as they have a special trade relationship with the United States. Imagine, those of you who are involved in manufacturing, all the other things that are going to happen if we have this special relationship. One of our American toy manufacturers has already announced that they will change their plant location from China to Mexico, and therefore will buy what is 85 percent of the value of the toy, the plastic parts from an American company instead of a Japanese company. (Applause.) There are absolutely unforeseeable consequences of this.
Let me just tell you about a couple of the companies that we just saw. The Harris Corporation is the number one United States supplier of radio and TV broadcast equipment. Twenty-nine percent of its $3 billion in annual sales come from exports. And in the last couple of years, sales to Mexico have gone from $12 million to $40 million a year, despite 20-percent tariffs. Imagine what will happen when the tariffs drop -- more people will be hired.
There's a small business from Covington, Kentucky, represented back here -- the Monarch Tool and Manufacturing Company, which began to export coin slots to Mexico over the last three years. The company was foundering in the mid-'80s. Now almost 70 percent of its sales come from exports.
There's a company here from California, which I am a satisfied customer, Golden Bear Sportswear. During the 1980s, this company, which makes, among other things, leather bomber jackets, moved this factory from San Francisco to Korea. And after four years they moved back. The lady that runs the company wrote me one of the most moving letters I've ever received, saying that she was absolutely determined to keep jobs in America and in California, to work with the people who helped to build the company and buy its products.
Now the business is flourishing and the owners are proud to put "Made In The USA" on the jackets. The family-owned business with 100 employees makes 100,000 jackets a year, most marketed through retailers like Brooks Brothers, the Gap, L.L. Bean, and Land's End. They have annual sales of $16 million. Instead of moving a plant to Korea, they'd like to move some of those jackets to Mexico. I think we ought to give them a chance to do it. That's what America is all about. (Applause.)
The beacon of our country's technological genius, Hewlett Packard of Palo Alto, California, has computers which now face a 20-percent tariff in Mexico, which will drop to zero. Three years ago, Mexicans bought 120,00 personal computers. Last year they bought 390,000 personal computers. Imagine how many personal computers 80 million people could buy if there were not a 20 percent duty on those products. (Applause.)
Let me just say two other things about this. One person that I talked to on the line, and I wish I could remember where he was, said, you know, Mr. President, as important as NAFTA is for Mexico and American trade, it may be actually more important for other things. It will say to the world whether we're a good trading partner. It will say to the world whether the United States government has a constant policy of supporting expanded trade and whether the President and the trade apparatus of the country can be trusted to make deals that America adheres to. Yes, you said that. (Laughter.) It will say to the world -- and I thank you for that. And I can tell you this, it will also say to the world and especially to the rest of latin America whether the United States wants to be a good neighbor again, whether we want to reestablish the kind of feeling that existed 30 years ago and 60 years ago. (Applause.)
I tell you, my friends, democracy and the fever for a market economy is sweeping across Latin America. I dream of the day when we'll have over 700 million people in this trading bloc united in believing that we can help one another grow and flourish. But all the other countries of the world are looking at us and all the other countries of Latin America want to know, are we going to do this or not.
Colombia, not a very big country, has a President struggling to liberate its country from the scourge of the dominance of drugs, struggling to develop a diversified free market economy. In the last two years, that little country's increased their purchases of American products by 69 and 64 percent on their own. The President of Colombia says, I want to be a part of NAFTA
Chile, for so long a military dictatorship, now a democratic free market economy endorsing NAFTA. They don't benefit from it, they just want it to be a symbol of something they can be a part of. Look at Argentina, once the eighth wealthiest country in the entire world, finally on the way back again. We have opportunities we cannot dream of. I don't know how long it will take us to put all that back together if we turn away from this.
The last thing I want to say is this: I have really tried to avoid talking about all the bad things that happen if it doesn't pass because I want us to be optimistic and upbeat. And I don't want us to adopt this out of fear. There's been too much fearmongering on the other side, and all kinds of ridiculous statements made. But it is simply a fact that Mexico needs access to sophisticated goods and products, that Mexico needs access to investors who can make secure investments.
What would we do in America if we turn away from this and they make this sort of arrangement with Japan or with Europe, and they make the investments there and then we have to deal with their products coming through the back door from Mexico? What will happen to our job base? I'm telling you, everything people worried about in the 1980s will get worse if this thing is voted down, and will get better if it's voted up. (Applause.)
My friends in California worried about the large influx of illegal immigrants -- California, a state built by immigrants, but burdened by illegal immigration in volume too great for a state with a very high unemployment rate today to handle. And people are afraid there. What's going to happen if it passes or if it doesn't pass? If NAFTA passes, you won't have what you have now, which is everybody runs up to the Maquilladora line, gets a job in a factory and then runs across the line to get a better job. Instead there will be more uniform growth in investment across the country, and people will be able to work at home with their families. And over the period of the next few years, we will dramatically reduce pressures on illegal immigration from Mexico to the United States.
But if you beat this, will it reduce the pressure for people looking for illegal immigration? No. It will increase the pressure on people coming here. So if you want to have the immigration problem eased, you must vote for NAFTA, not against it. We can go through issue after issue after issue and it's the same.
So I say to you, again, what we started this with. I know this has been a tough time for most Americans. There's all this bewildering change in the world and it's making people's jobs less secure. And at the same time, we've got a lot of problems here at home with violence, with the availability and cost of health care, with all the other things that are bothering our people. But we are trying to address those in this administration. We're trying to give Americans better security in their family lives, in their education lives, with their health care and on their streets. But we cannot -- we cannot create security out of an unwillingness to change.
This vote really is going to say a lot about what kind of people we expect to be. Are we going to hunker down and turn away and say, "My goodness, we're going to be overcome by a trade agreement with Mexico," or are we going to take this as the first step toward reaching out to the rest of the world saying, "Americans can compete and win again"?
We've got all the evidence we need. We know that it's not just the United States, no wealthy country in the world today can create new jobs without expanding trade. It cannot be done. Nobody is doing it. Nobody is doing it. And if you look at Europe, the most protectionist countries have higher unemployment rates. The most open market in Europe, Germany, is the only country with an unemployment rate as low as ours. I'm telling you this is going to define what kind of people we're going to be and whether we want to really compete and win in the global economy. I think Americans are winners. And I think when it comes down to it, the Congress will vote for us to win. (Applause.)
I want to say this one thing on behalf of the members of the Congress. They have to make this vote. I'm working with them to make sure that we can get the training we need for people who will be dislocated. We need to do that for people anyway, all across America. And we will have a strategy to help those areas of the country that are already in trouble that have nothing to do with this. But the Congress tells me over and over again, they hear from the people who are against NAFTA because they're afraid and they're whipped up. They don't hear from the people who are for it, who are going to win.
So we brought you here today not only to send a message to them, but so that I could ask you and companies like you and employees like your employees all across America to call or write the members of the Congress in every state without regard to party to talk about this. They need to hear from people who will get jobs, who will have increased incomes, who will have increased opportunities.
I agree with Mr. Iacocca. We have no one to blame but ourselves if this thing goes down. We've got the facts on our side, they've got the fear on their side. We need to get the facts to the Congress in the faces of the people who will win from this agreement. And we have to do that. (Applause.)
Every time you have to face a big change in your life, you can make one of two decisions: You can hunker down and hope it'll go away, or you can sort of face it and make it turn out all right. You can make change your friend. If you hunker down and hope it goes away, that works about one time in 100. The other 99 percent of the time, you better figure out a way to make change your friend, because it's coming at you, anyway. The world economy is coming at us, anyway. We have already paid the price for our inadequacies. We are now competitive and we can win, and it is time we use NAFTA to prove it to ourselves, as well as to the rest of the world.
Thank you, and God bless you all. (Applause.)
END10:49 A.M. EDT