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II. New Economy -
Opening Markets and Expanding Trade
President Clinton understands that future prosperity in the United
States depends on our ability to compete and win in the global
economy. He has steadfastly and consistently worked to open foreign
markets and expand trade -- to create jobs here at home.
Twenty-seven percent of our economy is now dependent on trade. Over 11
million workers in this country owe their jobs to exports. These jobs
pay higher wages, on average, than jobs not related to trade. Clearly,
expanding trade is critical to our effort to create good, high-wage jobs.
January 1, 1994 marked the launch of a historic trade agreement between the United
States, Canada,and Mexico. The North American Free Trade Agreement will
reduce barriers to U.S. exports in our first and third largest export
markets and expand opportunities for U.S. businesses and workers. It forges
a partnership with our neighbors that fosters prosperity for all three nations.
The Uruguay Round to the General Agreement on Tariffs and Trade is the
largest, most comprehensive trade agreement in history. It will cut
foreign tariffs on manufactured products by over one-third overall -- a
$744 billion global tax cut -- and eliminate tariffs in major markets in
a number of sectors in which the United States is particularly
competitive. It will extend world trade rules to services, such as
engineering and construction, greatly expand export opportunities for
U.S. agricultural products, and level the playing field by binding all
nations to the same trade rules.
Japan is our second largest trading partner and the second largest
economy in the world. Yet sixty percent of the entire U.S. trade deficit
is with Japan. Clearly that deficit is the result of barriers to U.S.
and other foreign goods in the Japanese market. Determined to open
the Japanese market, President Clinton set our negotiations with Japan
on a new course under the Framework Agreement in July 1993. Since then,
we have reached 14 agreements with Japan which have
expanded opportunities for U.S. businesses and firms and fostered job
growth. Improving our trade relationship with Japan and leveling the
playing field has been -- and will continue to be -- one of our highest
priorities. That is why we stood firm and won an agreement
to open Japan's auto and auto parts market to competitive foreign
products. We are determined to remove barriers to trade that unfairly
inhibit the export of quality American goods.
China is increasingly important as a market for U.S. goods and services
and as a major exporter. Sweeping economic reforms have contributed to an
explosive growth of income and trade. Yet China remains a closed market
to U.S. exports and our trade deficit with China has grown, reaching $29
billion in 1994. We are committed to opening China's market and to
ensuring that they follow international trading rules. In February 1995,
we concluded an agreement which will provide protection in China of
intellectual property rights for U.S. companies. Bringing China into the
international trading system will foster growth in both countries and
assist China in becoming a more open, democratic country.
Asia Pacific Economic Cooperation
The Asia Pacific region has the fastest growth in the world -- three
times the rate of the established industrial countries. By the year
2000, the East Asian economies will form the largest market in
the world, surpassing Western Europe and North America. This growth has
led to an explosion of trade with the United States. East Asia is the
number one export market for U.S. products. Our exports to Asia account
for over 2 million jobs in the United States. President Clinton has
pressed to expand trade with this vibrant region. In November 1994,
leaders of the APEC nations agreed in Bogor, Indonesia to eliminate
barriers to open trade in the Asia Pacific region by 2020.
Free Trade Area of the
Latin America is the second fastest growing economic region in the
world. U.S. exports to Latin America jumped from $30 billion in the
mid-1980s to over $90 billion in 1994, creating over 600,000 new U.S.
jobs. U.S. exports to Latin America now approximate our exports to the
European Union, and, if trends continue, may reach $232 billion by 2010,
greater than our combined exports to the E.U. and Japan. Recognizing
these opportunities, President Clinton hosted the Summit of the Americas
last December in Miami, the first time in 30 years that the nations of
this hemisphere have gathered together. The 34 democratically elected
leaders agreed to construct The Free Trade Area of the Americas, or
FTAA, by the year 2005.
Forging trade agreements to open foreign markets is
just one part of the effort. We must also make it easier for companies to
export. Through the National Export Strategy, the Clinton Administration
has liberalized controls on the export of over $32 billion of computers;
facilitated the promotion of exports through one-stop shops, which
provide information on all Federal export promotion programs; coordinated
a strategy to secure more than 70 contracts worth more than $17 billion
for U.S. firms; and sought to expand trade finance programs that means
more American jobs in hi-tech and manufacturing industries.