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FOIA Number: 2017-0364-F
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This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Council of Economic Advisers
Series/Staff Member:
Laura D'Andrea Tyson
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OA/ID Number:
5062
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Folder Title:
USTR [United States Trade Representative] [2]
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20
7
1
1
Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001. report
re: Probable Economic Effect on U.S. Industries and Consumers of
/02/1994
P1/b(1)
Accelerated Elimination of U.S. Tariffs on Certain Articles from
Canada (49 pages)
COLLECTION:
Clinton Presidential Records
Council of Economic Advisers
Laura D'Andrea Tyson
OA/Box Number: 5062
FOLDER TITLE:
USTR [United States Trade Representative] [2]
2017-0364-F
ip3832
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RR. Document will be reviewed upon request.
APR- 7-94 THU 17:58
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CC: JES ASB
BC,
Transcript of Address by U.S. Trade Representative Mickey Kantor to the Center for National
mN
Policy, April 7, 1994, National Press Club
PO
What we have tried to do in this administration is take trade policy and ensure that we enhance
global growth through increased productivity. The President had the biggest year in trade in
American History last year. We have a president who truly understands the inter connection
between what we do domestically in our economy and international economics, trade, politics,
and our strategic relationships. He has put them into a trade policy which has truly led the world
in terms of major agreements and major initiatives, which I think will stand us and the world in
good global growth in good stead for years to come. I need only mention a successful conclusion
of the North American Free Trade Agreement (NAFTA) with this president who took an
enormous political chance and won. But he won for the best reasons possible; that is to enhance
the growth of jobs not only in this country but throughout North America. But also to recognize
that the second fastest growing region in the world is, of course, Latin America. And that we
have an interdependent relationship, as we do with the world, and even more so with Latin
America and it should be extended in the future. The second, of course, is the successful
conclusion after 8 years of blood, sweat, tears, frustration, anxiety, and argument over the so
called Uruguay Round.
It's the largest trade agreement in history and I'm going to talk about that a bit today and about
Merrekesh and what we are trying to accomplish with the establishment of the new world trade
organization, especially the inner section of trade in internationally recognized labor standards.
Which we believe is a critical issue. Another one I would just mention is the successful meeting
in Seattle of the Asian Pacific Economic Cooperation Forum under the leadership of the
President. We had leaders from 13 Asian and Pacific Nations who joined together to talk about
the future of one of the fastest growing regions in the world and their connection with this
hemisphere. We established a trade investment framework that I think is going to prove to
provide great dividends in the future.
I can make a little bit of news today. We have just 45 minutes or an hour ago been told that the
GATT led by director general Peter Sutherland has agreed in the preparatory committee which
will set up a new world trade organization that they will take up the issue of the intersection
between trade and internationally recognized labor standards. This is 47 years in coming.
(Applause)
The President of the United States made this one of his highest priories. He spoke of it on
October 4, 1992 at North Carolina State University and he has spoken of it many times since.
And a consensus was achieved today in what they call the TNC committee of the GATT. That's
all international trade speak, but very important in this connection. Literally, you can go back to
1919 and the Treaty of Versailles and see the connection that the international community has
made between labor standards and trade. And we lost that consensus that we had in '47 and 1948,
I think to the detriment of trade and to the detriment of growth, and to the detriment of creating
growth around the world. We are pleased that at least we now have a forum and an agenda and
now it's up to us to continue to progress in that area.
APR- 7-94 THU 17:59
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President Clinton understands the importance of addressing labor standards in trade agreements.
During the campaign, he endorsed the NAFTA, but insisted on negotiating a supplemental
agreement that protected worker rights in this country, Canada, and Mexico. He has continued to
raise the issue of labor standards with our trading partners since taking office. He said it best this
January, when he said that "while we continue to tear down any competitive practices and other
barriers to trade, we simply have to insure that our economic policies also protect the
environment and the well-being of workers." Of course, this is the beginning, not the end. The
challenge is now to seriously address this and other pressing issues. Such as competition, policy,
and the environment. We should take it on a much grcater importance with the rise of an
interdependent global economy.
Our goal in creating the world trade organization is not to have more trade for its own sake, but
to raise standards of living, not just in the United States, but around the world. Opening up new
markets and forging interdependence is critical to fostering global growth and creating jobs in all
countries and in the world. Trade accounts for a quarter of our GNP today. In many countries
that number is much higher. The key to maintaining economic growth is by building the middle
class in countries around the globe. Moving people up from poverty into the middle class
ensures that they have the incomes to buy our products, as well as those in their own countrics.
It fosters stability and democracy within those countries. Ultimately, it strengthens the global
trading system and is essential to the future success of that system.
Nations are beginning to recognize that economic growth must occur at a rate the environment
can sustain. There will be a committee on trade and environment in the world trade organization,
for the first time, to discuss the issue with creation of a work program as its first priority. The
United States has led the fight in this committee and obviously strongly favors its future work.
But sustainable development has another side as well. As productivity rises, it must occur in
tandem with the growth of middle classes, the rises of standards of living and the improvement
of internationally recognized labor standards. If we do not acknowledge and address this link,
the global trading system will not be able to maintain future growth and it will lose political
support around the world.
By labor standards, we mean basic rights: Freedom of association, and freedom to organize and
bargain collectively; freedom from forced or compulsory labor; child labor standards and
conditions of work. Some argue that as a nation develops economically conditions of work will
improve on their own. In other words, this view holds that child labor or poor health and safety
standards, low wages, lack of unions, and so forth are conditions that will inevitably disappear as
nations prosper and grow. History shows, however, that this does not occur as a natural course
of events without struggle. In fact social justice, market economies and democracy are all
closely linked. I was just in Chile. In fact, the Ambassador is with us today and met with the
new President Fray. And I can tell you how the new President of Chile and the President of
Argentina and the President of Columbia are all certain in the way that they look at their
developing market economies, their democracies and social justice and how they are inevitably,
inextricably connected together. I think we can all take a lesson from that. What they have done
is nothing short of miraculous in Chile, Argentina, and Columbia and we can draw, I think, great
solace from that. In the United States the end of child labor, the establishment of a minimum
APR- 7-94 THU 18:00
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wage, the right to organize and create a union were all critical to the rise of the middle class in
this century. It all occurred only as the struggle of hardworking and visionary people including
many who sacrificed a great deal including some who even sacrificed their lives. Right now in
Latin America, as I have mentioned, countries such as Chile. In Asia, countries such as Korea are
showing that economic progress can and must go hand in hand with social progress. In Poland,
labor unions were critical to the development of their market economy.
Time after time, the lesson is clear. Democratic and social reforms enhance the market oriented
system. I understand that there are some nations that wish to use labor standards as a
protectionist tool. Let me make this clear, the United States will oppose and resist any such
effort. In fact, this underscores the need to address these issues in a multilateral forum where
everyone has a voice. The goal should only be to improve the standard of living for workers
around the globe. If we can not deal with this issue multilaterally in an affective way, we will
begin to see countries deal with it in other ways.
When the GATT began after World War II, it only covered tariffs. Later, we began to address
non-tariff barriers. In the Uruguay round, we are writing rules for services and protecting
intellectual property for the first time. Now we must go to the next step, which is realizing that
trade means more than lowering barriers, it means promoting sustainable economic development
as well. Let me just note, as we protect intellectual property, as we bring services under the
coverage of the world trade organization, as we extend coverage, and extend and open markets in
agriculture, and manufactured goods, as we build a new dispute resolution mechanism, as we
begin to look at sustainable development in terms of the environment, it would not serve us well
to not look at how we treat the people who create the goods that brought the growth as we
continue to progress. And we are committed to it, and will remain committed to that.
These are signs of a changing world, a world that is coming more interdependent. A world that
is completely different from the one I knew as a child and from the one I have known most of
mine or our adult lives. It is a world marked by challenge and reward. It is marked by great
opportunities, but to make it work all nations must accept responsibility. It is a world where the
key to prosperity and improving the standards of living is through engagement, not withdraw.
We must harncss the forces of change in the world to the benefit of all Americans and people
everywhere. That means continuing to tear down trade barriers. It means promoting sustainable
economic development through the improvement of labor standards.
Last year, Americans embraced the President's imperative to compete not retreat. And this year
as we implement the Uruguay Round, and as we begin to address labor standards with our
trading partners, we will do so again.
###
APR- 7-94 THU 16:57
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Distribution CEASTAL
CC: BC' ASE
PO
REU 04-07-94 14:21 EST 100 Lines. Copyright 1994. All rights reserved.
SC-KANTOR-CENTER-NATIONAL SKED
mN
THE FEDERAL NEWS REUTERS TRANSCRIPT SERVICE
LUNCHEON REMARKS BY U.S.
TRADE REPRESENTATIVE MICKEY KANTOR
BEFORE THE CENTER FOR NATIONAL POLICY
TOPIC: URUGUAY ROUND
NATIONAL PRESS CLUB, MAIN LOUNGE
WASHINGTON, D.C.
THURSDAY, APRIL 07, 1994
TRANSCRIPT BY: FEDERAL NEWS SERVICE
520 NATIONAL PRESS BUILDING
WASHINGTON, DC 20045
FEDERAL NEWS SERVICE IS A PRIVATE FIRM AND IS NOT AFFILIATED
WITH THE FEDERAL GOVERNMENT.
COPYRIGHT 1994 BY FEDERAL INFORMATION SYSTEMS CORPORATION,
WASHINGTON, DO 20045, USA. NO PORTION OF THIS TRANSCRIPT MAY
BE COFIED, SOLD, OR RETRANSMITTED WITHOUT THE WRITTEN AUTHORITY
OF FEDERAL INFORMATION SYSTEMS CORPORATION.
TO RECEIVE STATE, WHITE HOUSE, DEFENSE, BACKGROUND AND OTHER
BRIEFINGS AND SPEECHES BY WIRE SOON AFTER THEY END, PLEASE CALL
CORTES RANDELL AT 202-347-1400.
COPYRIGHT IS NOT CLAIMED AS TO ANY PART OF THE ORIGINAL WORK
PREPARED BY A UNITED STATES GOVERNMENT OFFICER OR EMPLOYEE AS A
PART OF THAT PERSON'S OFFICIAL DUTIES.
AMB. KANTOR: My chief problem here is going to be able to
look at this speech at the same time I look through these
microphones. If I can do that, I think will have accomplished a
lot this morning.
Thank you for the very kind introduction and remarks.
Although, I'm not sure when you are introduced as a lawyer and
a politician how you should react to that in today's society
but I'll. ask Kirk Donnell (sp) about that and I'm sure he'll
give me some advice later.
I appreciate the opportunity to be here and thank you
Lorraine and Mike, thank you, You're old and dear friends and
I appreciate your willingness to have me come here and I
appreciate everything that you do as an organization. I think
it's awfully
important that you hold the forums that you dor you allow the
interaction of dialogue between people both in and out of
government and in your organization but also to a larger
audience. Even in your private sessions have tremendous
importance and I've even asked to be invited to one so that I
can listen rather than talk at you. One thing that I've found
1
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in government this is my -- I've been government before as a
Naval officer and as a legal services officer which is little
different than being in the cabinet I've find the one thing
you don't do is listen enough. What you're called upon to do
is always expound, sometimes articulately, sometimes not, but to
expound and I think we don't listen enough and so I appreciate
everything you do and appreciate your having me here today.
What we have tried to do in this administration is to take
trade policy and make sure that we have enhanced global growth
through increased productivity. The President had the biggest
year in trade in American history last year. And it was not
merely luck or timing, we have a President who truly
understands the interconnection between what we do domestically
in our economy and international economics, trade, politics and
our strategic relationships and he has put them into a trade
policy where he has truly led, led the world in terms of major
agreements and major initiatives which I think will stand us and
the world and global growth in good stead for-years to come.
I need only mention the successful conclusion of the North
American Free Trade Agreement where this President took an
enormous political chance and won but he one for the best
reasons possible that's to enhance the growth or jobs, not
only in this country but throughout North America, but also to
recognise that the second fastent growing region in the world
is of course Latin America and that we have we. are an
interdependent relationship as we do with the world, even more
50 with Latin America and it should be extended in the future.
The second of course was of courses the successful
conclusion after eight years of blood and sweat and tears and
frustration and anxiety and argument over the so-called Uruguay
Round
It is a role where the key to prosperity and improving
standards of living 1s through engagement, not withdrawal. We
must harness the forces of change in the world to the benefit
of all Americans and people everywhere, That means continuing
to tear down trade barriers, it means promoting sustainable
economic development through the improvement of labor
standards. Last year, Americans embraced the President's
imperative to compete, not retreat. And this year as we
implement the Druguay Round and as we begin to address labor
standards with our trading partners, we will do so again.
Thank you very much.
MODERATOR: Okay, thank you very much- I think that was an
important speech and we should all pay extremely close
attention.
We have time now for some questions and there's one back
there in the corner.
0 Ambassador Kantor, I've been reading back in books and
articles about that (inaudible) -- and article 16-4 says the
laws and the administrative procedures -- (inaudible)
procedures and regulations of all the members of GATT must ba
conforming rulings of World Trade Organization. Could you
please address the condern, people who -- the law in our
2
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country, federal, state and local laws, not just in trade, but
in (word inaudible) concerns like agriculture and other
areas can be challenged by other nations (words inaudible).
Could you please address the concerns of Americans who are
concerned about our national policy and our Constitution being
undermined by the World Trade Organization ruling?
AMB. KANTOR: You read only one part of it and I am
delighted that you stay up late at night and read section 16.4.
It means all those late nights we spent were not in vain.
The Eact is the U.S. nor does any other country have an
obligation to pass any law, regulation or adopt any policy in
accordance with the GATT ruling. We are free to either adopt
OT not adopt, to change or not change, assuming it was a ruling
that was adverse to a U.S. policy law, regulation or otherwise
that it goes for a state or the federal government. However,
if we are found to be wanting through a dispute settlement
process-or in another way we have a choice to make either to
change the law or regulation which has been
found wanting which I don't expect to happen, or to pay
compensation in terms of a trade action on the part of another
country.
That would be up to the administration and the Congress of
the United States. So there's no sovereienty loss whatsoever.
The same thing pertains under GATT today, it would pertain
under the dispute settlement under NAFTA, or the Canadian free
trade agreement. We have a choice to make. And it. comes up
quite often. And sometimes you choose either to follow or not
follow.
What is important though, and in the sections you didn't
cite, is we have a dispute settlement mechanism in the GATT
that, one, cannot does not allow a country to block rulings,
which will be in the interest of the United States because we
tend to follow our international laws and fulfill our
international obligations. Second, you can cross-retaliate and
that is important, especially in the areas of intellectual
property protection where we have huge trade going one way and
very little coming to the United states. We could cross-
retaliate if someone violates in that area and does not change
their practices in accordance with 16.4 that you have cited.
So therefore, we have a dispute settlement mechanism that is
much more effective, that is certainly favors the United
States, and yet we have lost no sovereignty in the process.
Let me add one other point and I'm sure I'm going on too
long -- but this is important what you've raised. The
decisionmaking mechanism of the World Trade Organization is
still a consensus mechanism. A country can decide not to
not to change its laws or regulations based upon any amendment
or to adhere to any amendment to the World Trade Organization,
so you still need consensus even though you have two-thirds and
three-quarters votes on amendments to the rules of the
organization. The United States, in that particular instance,
could refuse just to follow that rule if it did not want to.
That is clear under the document as well.
3
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of Mr. Ambassador, I'm Jack Sheehan (sp) from the
Steelworkers Union. Now I'd be very remiss if I let this
opportunity go by to really express a great deal of
appreciation for the statements that you just made on labor
rights. I think it's a breakthrough that's occurring here,
it's been a long time coming, and I think linking this whole
idea : - and I'm prone to give a speech on it, I'd better not --
but
AMB. KANTOR: It's okay, Jack, keep going. (Laughter.)
Q -- lowering the trade barriers, enhancing growth,
enhancing the standard of living which can be achieved, we
think, primarily but certainly consistent with the spread of
unionium throughout the world -- (off mike) make that
statement here is very important. I know we're on the
preparatory committee, as you were saying, it's on the agenda.
I hope we can break through now to get a standing committee
at the WTO (off mike) nonetheless I just couldn't let
this opportunity go by to (off mike):
AMB. KANTOR: Thank you, Jack, very much. That's vary kind
of you. As you note, it is too long in coming and we do have a
challenge, though, that we have not we have not reached the
point of either a committee being set up or even a working
party, but it at least it's on the agenda. It took, as I said,
only 47 years LO run up to it. You don't want to move too
quickly in these international organi zations ive found.
(Laughter.)
But I do want to sayoff to everyone There was consonsus
organization, there was consensus on this issue, to Peter
Sutherland, the director general of GATT, certainly to
Ambassador John Schmidt (sp) and hers in Geneva who work for
USTR who literally didn't sleep for a week trying to put this
together, and to those in the labor movement and other
non-governmental organisations and in this administrationshed
so hard for it it started with the president of the United
States. So this is not just one person who did this, this has
been a long time coming, and I recognize that.
You know. our laws have long reflected it's interesting,
it was the Reagan administration who insisted that i.We have
worker rights protections in the Caribbean Basin Initiative.
People forget that. We have worker rights provisions in our
General System of Preferences law. We have worker rights
provisions in our 301 law. This country has long under
Republicans and Democrate, this 1s not a partisan issue have
been there. It's just we needed to move the international
community along, and let me just say, with their great
cooperation it is moving. So thank you very much, I appreciate
that.
0 Do you think the U.S. would now consider joining the ILO,
and should it, and why or why not?
AMB. KANTOR: Well, first of all it's adopting conventions, I
think. I think in 1980 we went back into the ILO " (aside)
Jackie, is that not correct? So talking about we've adopted
it's very interesting. There seems to be an inverse
correlation with the ILO. You adherence to ILC standards is
4
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one that we adhere
to all ILO standards and conventions, and somebody can
correct me if I'm wrong. I think that's correct. There's 73,
75 of them, something like that.
There seems to be an inverse correlation between the number
you adopt officially and the number you adhere to. (Laughter.)
There are countries in the world who have adopted every one of
them, yet you'd be hard put to find them adhering to those
standards.
The United States takes a backseat to no country in terms of
not only recognizing international labor standards, but
adhering to them and going further, we'll continue to advocate
them. The history of the U.S. and the ILO is somewhat stormy
and you understand much of that history, but we are members,
we'll continue to work with the ILO, but the fact is we believe
the ILO, working through the and with the World Trade
Organization, and engagement on trade, is where we can make
great progress.
Studies now have come out, there are now three independent
studies, which indicate we'll collect in five years about $3 in
federal revenue for every dollar in tariffs we cut because of
the Uruguay Round. The Uruguay Round will contribute about a
trillion dollars to our gross product over 10 years -- that's
the 10w end and will add about $17,000 to a median family
income over that period of time, over 10 years. So it's an
enormous economic winner. CREWSS are
But we can't count all that, as you know, in the pay-go
concept, which you're correct, Director Panetta is working very
hard to come up with a series of cuts to programs as well as
some fees that would try to meet the five-year pay-go need.
We're not sure: it's going to be between 11 and 13 billion
dollars, somewhere in that area. We need to work that out with
the Congressional Budget Office as to what the actual number
18.
As you recall, we had a similar problem, a smaller problem
but similar, with NAFTA, and with four weeks to go we found the
programs to cut and the increases in fees that were acceptable
to both Republicans and Democrats on the Hill. We're working
with both sides. We have set up informal working groups with
both the Republican and Democrats in the Senate and the House,
and I can assure you we're working together and we will
we'll come up with a solution to that problem. We intend to
ratify the Uruguay Round this year.
Q Yes, the enforcement mechanism for labor standards and
environmental standards under NAFTA has been criticized as
being weak, complex, convoluted, taking a very long period of
time, and almost impossible to enforce. will the new standards
being developed for labor standards and environmental standards
under the GATT, will they be any better?
AMB. KANTOR: (Chuckles.) First, it won't surprise you that
I disagree with your I know it's not your characterization,
you're quoting other folks who have said that the labor and
environmental supplemental agreements aren't as offective as
5
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they might have been. I don't agree with that, of course. I
think it was an incredible step forward that the president
articulated on October 4, 1992. If you go back to that speech
and see what we did, we achieved all of what he indicated we
would achieve in that speech.
Now, is it perfect? of course not. There's no agreement in
the world that's perfect. But are we going to be able to
ensure that
environmental and labor laws in each of the three countries
in North America are enforced in order to make and to make
sure we harmonize up these standards? Absolutely. The answer
is yes.
And let me say something about what happened today. without
the United States insistence there be supplemental agreements
to the NAFTA on labor I know, Jack, we disagreed to some
degree on that wo would not have had the moral authority to
go in the last few weeks to the GATT and World Trade
Organization and 'say; we stand for the intersection of trade
and internationally recognized labor standards.
We did it in NAFTA, we're enforcing those standards. We're
ensuring that countries enforce the laws in this area, we're
harmonizing up in both of these areas and therefore we now want
to begin to address these issues, address these issues in a
multilateral context.
HOW it's done, under what suspices, what- is the process and
the substance of course will be left. to discussions in the
future. obviously we have our own ideas and it would be
unfortunate if I began, to roll them out today. It's enough
today to: say that it's on the agenda and we're beginning. We
have a long way to go but I can assure you that the experience
of NAFTA and what we tried to achieve will be instructive as we
move forward.
OF with regard to NAFTA, are you in a position to comment
about how committed the new PRI candidate (name inaudible)
is to maintaining and strengthening NAFTA?
AMB. KANTOR: Frankly, I've never spoken with him about it
and SO I can't speak to that. I can only advance the thought
that is part of President Salinas' administration who was
unanimously in favor of the North American Free Trade agreement
and of course advocated it strongly for years that I would be
surprised if Mr. Zedillo wasn't strongly in favor if elected as
President of Mexico would try to strengthen that agreement. I
would just be surprised 1£ he didn't. I can't speak any
further than that. I have not seen any statements by him
frankly, nor have I talked to him about it.
MODERATOR: One more question.
Q The financial markets have move around widely over the
last month. Some are (word inaudible) attribute it
partly to the high connections on trade between the U.S. and
Japan. As we come towards the July G-7 Summit, the one-year
enniversary of the Clinton- Miyasawa agreement on objective
criteria, would you expect these trade sanctions to intensify
or to become softer?
AMB. KANTOR: Well, I would only indicate two things: One,
6
APR- 7-94 THU 17:02
CNTR FOR NATL POLICY
FAX NO. 2025465789
P.08
I think the indications that you have just articulated that
some how trade tensions between the two countries has somehow
had an affect upon the markets 18 probably vastly and wildly
overstated. The Yen was at 125 when the Clinton administration
came into office. It was at 111 at the time the framework
agreement was entered into in July '93; it has fluctuated
between 103 and 108 between the last eight months and nothing
that has happened has really affected that fluctuation so
that's number one.
0 Ambassador Kantor, were you disappointed that you were not
able to convince other GATT members to create a working party
on labor rights and how are you going to convince other nations
that don't agree with the U.S. approach -- (inaudible) --
making the preparatory agenda (inaudible)?
AMB. KANTOR: First of all, let me say that all of you from
the press who are asking the questions, you are much more
polite in this audience, I really appreciate the forum.
(Laughter:)
Let me address that directly. The fact is that wa didn't ask
for a working party, we asked for the agenda of the preparatory
committee. That's all we have asked for to take this up and to
make it part of their agenda. Obviously we have not made a
decision how to now extend this discussion into the WTO itself,
effectively. That's something we'll work with our partners in
the European Union, Japan, might note, supported us strongly
today in Geneva, as well as Sweden, as well as Australia and
other countries as well. That is a matter of a tactical
matter that we will work with our trading partners on.
I think given the strength of leadership that the president
has given on other issues, and the fact that we would not have
had a reengagement of the Uruguay Round without his strong
leadership, his insistence that we reach a market access
agreement at the G-7 in Tokyo, his personal intervention in the
last stages of the negotiations in Geneva to put together the
package, which resulted in the Uruguay Round, gived me
confidence that his leadership, the commitment of the United
States, the joining of our other trading partners in this drive
for intersecting labor standards with trade, will meet with
success.
It's not going to be easy. We have got a big challenge ahead
of us, but I think we have taken the first and modestly,
modestly dramatic step in that direction.
d Mr. Ambassador, I wonder if you could comment. on what
plans the administration has (inaudible) recently we
heard that unless there is some broad based tax increase there
is no way to find the necessary billions to pay for it. Do you
have any thoughts you can share with us?
AMB. KANTOR: I am glad you put I could share with you, I
have a lot of thoughts. (Laughter.)
We are not looking at any broad based tax increase whatsoever
in order to fund the lowering or the loss of tariffs by the
implementation of the World Trade Organization.
Let me make a number of preparatory comments about that. One
is that we have a static budget concept and system adopted in
7
APR- 7-94 THU 17:03
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FAX NO. 2025465789
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1990, it's called pay-go, and frankly it doesn't recognize the
dynamic economy that we live in.
of
EXECUTIVE OFFICE OF THE PRESIDENT
COUNCIL OF ECONOMIC ADVISERS
WASHINGTON, D.C. 20500
March 25, 1994
THE CHAIRMAN
MEMORANDUM FOR MICHAEL KANTOR
U.S. TRADE REPRESENTATIVE
FROM:
LAURA D. TYSON Jame D.Typon
SUBJECT:
Worker Rights in the GATT/WTO
With regard to the proposed language for the Political
Declaration I suggest replacing the proposed language on "social
objectives" with language borrowed from the GATT charter so that
the Declaration would read "they also expressed the view that
trade gains should lead to an increased standard of living and,
in this connection
(continues as original) "
In general, I think the approach you proposed at Friday's
meeting on labor rights and the WTO is a sound one. Thanks for
your judicious efforts on this politically salient issue.
March 24, 1994
TO:
Laura Tyson
FROM:
Bill Dickens
Marcus Noland
SUBJECT: Language on Labor Rights for final Uruguay Negotiations
Kantor is proposing two separate initiatives. The first is for the
WTO to take up the issue of labor standards and trade. The second
is for the inclusion of a statement that ministers agree to early
consideration of the issue of labor standards and trade. We see
two issues here:
1. There is a tactical issue: Should the U.S. be pushing for a
discussion of labor standards?
2. There are substantive issues: If we go forward, what kind of
labor standards do we want? Should we introduce the new concern of
"social objectives" mentioned in Kantor's proposed wording or stick
with what is in the GATT charter -- trade should improve standards
of living.
Should we be pushing for a discussion of labor standards? First,
internally we should be clear that in doing so we are not advancing
U.S. economic interests, but rather our political and social
interests. Those would have to be the main substantive reasons for
wanting such a dialog.
O If the existence of such a dialog would deflect criticism of
our open trade policies it might be useful as a political device to
help reduce pressure for restrictions.
O At the same time, the likely failure of such as effort in the
GATT could strengthen subsequent calls for US unilateral actions by
organized labor.
We ve ILD shandar I in The GSP
What kind of standards do we want?
ag 20 thiti 9 wore The Costs new
petitions where urgort surges all
Any labor standards, however genuinely motivated, will inevitably
be subject to rent-seeking behavior by self-interested groups. The
outcomes in the GSP process (where there is already a labor
standard) are not inspirational in this regard. Hence, it is
desirable that any labor standards be designed with a "defensive
mus
orientation in mind. Such "defensive" standards might include
stave
7
0
an emphasis on coercion -- an involuntary choice --, not wages
or safety -- more voluntary choices --, as the prime criteria
a recognition that standards -- including the relevant minimum
working age -- will vary across countries by income
O
7
violations should be tied to traded goods sector
no wonldwreli
no
Ceneral
men
Should we introduce the new concern of "social objectives"? This
is not the way we have framed such discussions in the past. We
would prefer wording borrowed from the GATT charter and propose to
rewrite Kantor's language to read " trade gains should lead to an
increased standard of living and, in this connection
"
How much is it worth to the US? It would be worth asking Ambassador
Kantor two questions:
1) Would the US be willing to sign ILO protocols etc on standards
(we don't now)
2) What would he be willing to give up in the post-Uruguay Round
agenda to get workers rights? Environment? Services?
02-14-1994 17:24
202 395 3390
DEPUTY USTR
P.01
TELEFAX COVER SHEET
OFFICE OF THE UNITED STATES TRADE
REPRESENT TIVE
Executive Office of the Presid +1
Washington. D.C. 20506
Date: 2/14/94
Time Sens: 5:45 pm
PHOTOCOPY
PRESERVATION
Number of Pages Excluding Cover Sheet: 2
TO:
FAX UMBER:
DR Laure Tyson
244-5323
FROM:
Acub. Kanton
PHONE:
(202) 395-3204
FAX:
(202) 395-3911
SUBJECT:
COMMENTS: Talk Points for Press
11
e 6:00pm
02-14-1994 17:25
202 395 3390
DEPUTY USTR
P.02
PHOTOCOPY
DRAFT
PRESERVATION
Talking Points for Press Call
2/14/94
o
Tomorrow we will be making announcements about the operation
of one of our telecommunications trade agreements, affecting
Motorola's efforts to sell cellular telephone and network
equipment in Japan. This issue is complicated, but it
illustrates some important themes in the trading
relationship between the United States and Japan.
The Japanese repeatedly claim that their system is open and
that there is no problem in the trading relationship. The
Japanese claim that US firms don't try hard enough, and that
the quality of the US products isn't there. Here is a case
that shows the reality of the closed Japanese markets and
the competitiveness of US products.
o
The situation is this. In Japan, Motorola has done
exceptionally well in areas where it has been allowed to
sell its products. In areas where the Government of Japan
has imposed barriers to those products, Motorola's results
have been negligible.
0
In the areas outside the Tokyo region, Mctorola was able to
find a willing partner and has sold hundreds of thousands of
cellular telephones and the equipment to build a full
cellular telephone system. Motorola equipment easily
accounts for half the market, leading to more than 300,000
subscribers against Japanese competition.
O
In Tokyo, however, two trade agreements have not yet yielded
full access to the market for Motorola.
0
The first agreements were concluded about nine years ago,
and one of its main principles was comparable market access.
o
Problems with that agreement led to a second agreement in
1989, with more detail, to guarantee that US firms had
access to the Tokyo market.
o
In this second agreement, the Government of Japan chose tea
company that would be Notorola's partner in building a
cellular system in the Tokyo area. Unfortunately, this
company was already committed to building another competing
system. As a result, after two trade agreements and nine
years of effort, Motorola has only been ble to sell about
12,000 telephones and small quantities network equipment
in the Tokyo region.
o
Since then the Government of Japan has insisted that it has
neither the powers nor the interest to ensure that that firm
developed a cellular system using Motorola equipment along
the lines envisaged in the 1989 agreement. It was allowed to
no ahead with the Japanese-based competing system.
02-14-1994 17:26
202 395 3390
DEPUTY USTR
P.03
0
In addition, during this period of delay, Japanese
competitors had the opportunity to devlop products that
could compete with the Motorola units.
0
This problem illustrates how the Government of Japan in fact
manages trade. What we are attempting to do is unmanage that
trade and allow the market to work.
The record shows that where Motorola has bean permitted to
find willing partners, it competes effectively. In areas
where it has been subjected to a shotgun marriage, the
results are what one might expect.
At this point we have seen one of our most competitive
telecommunications firms, a world leader in 5 critical
technology, blocked by new types of trade barriers and
Japanese government action to manage the market.
PHOTOCOPY
PRESERVATION
1
"THE CLINTON ADMINISTRATION AND TRADE"
SPEECH BY AMBASSADOR MICHAEL KANTOR
U.S. TRADE REPRESENTATIVE
NATIONAL PRESS CLUB
MAY 5, 1993
A little over two months ago, at American University,
President Clinton set forth his vision of America's role in the
global economy. It is a vision rooted in the belief that we are
at the third great moment of decision in the 20th century.
"will we repeat the mistakes of the 1920's and 1930's by
turning inward?" He asked. "or will we repeat the successes of the
1940's and 1950's by reaching outward?" His answer was clear: We
will reach outward and adapt to the new global economy. We will
compete, not retreat.
Trade is central to the President's vision of America's future
in the world. Trade is not an abstract concept. Trade means money
in people's pockets. Trade means jobs. Trade means that working
men and women in Raleigh, North Carolina, make and sell electrical
products for computers in seventy countries. Trade means that a
minority-owned company in California exports electromechanical
products to five countries. All over this country, trade means
that working people can put dinner on the table and support their
families.
The benefits of trade are not limited to the United States.
As the President went on to declare in his speech at American
University, the fabric of commerce will also shape global
prosperity. "For now and for the foreseeable future," he added,
"The world looks to us to be the engine of global growth and to be
its leaders."
We can't live up to the twin tasks of American prosperity and
global leadership unless we are competitive. The Clinton
Administration is committed to making America competitive. We can
only be competitive if trade policy is an integral part of economic
policy.
Gone are the days when this nation could subordinate trade
concerns to "National Security" in the traditional sense of the
term. The strategy of containment was appropriate during the cold
war, but it was a static strategy, aimed at halting Soviet
expansionism. In those years we worried about the "doomsday clock"
-- with hands perilously close to the midnight of nuclear war.
for a long time, our strategy was mutually assured destruction.
2
Today our challenges are dynamic, not static. Economic
strength, founded on human resources and nourished by trade is a
pillar of national security in this new post-cold war age. Our
security interests -- and those of others -- are inextricably
linked to the growth and fairness of the global trading system.
Economic policy begins with the President's domestic economic
program. The challenges are enormous. Unemployment is still at
seven percent. More than one in ten Americans is on food stamps.
More than sixteen million people are looking for full time work and
having no luck at all.
We must provide American workers with the training they need
for good jobs in the industries of the future.
We must reduce our structural deficit.
We must provide American enterprise with the capital it needs
to expand and compete.
And we must provide the American economy with the stimulus of
a thriving global marketplace.
The goals of the Clinton Administration's trade policy are
clear. We want to open more foreign markets. We want to do more
business with those whose markets are already open. We want to
eliminate trade barriers that are raised against us and others.
We need to build faith in the international trading system.
too many people in the American public think that trade hurts them,
that trade may take away their jobs. The truth is the opposite.
The numbers speak for themselves. Every billion dollars of
exports creates twenty thousand new jobs in the United States.
There are now more than seven million Americans whose weekly
paychecks are related to and dependent on merchandise exports
alone. A majority of those people work in the manufacturing sector
and they earn almost $3500 per year more than the average American
worker.
And when jobs in the service sector are oriented toward trade,
they also provide workers with valuable incentives. The average
salary for a service worker in the export field is estimated to be
20% percent higher than the average service workers's salary.
So trade means the hands of the clock move forward, toward
higher wages and better jobs for working Americans.
3
Take Ron Thomason, a materials expediter at Caterpillar's
large bulldozer assembly plant in East Peoria, Illinois. He says,
"I owe my job to exports." At the IBM facility in Rochester,
Minnesota, 200 out of 900 people know that their jobs depend on
exports. So do the 18 employees of a process control company in
Tucson.
At the same time, we have the largest open market in the
world. We take the largest share of exports from developing
countries. In four major industries -- textiles and apparel,
steel, autos, and footwear -- the United States imports
from one to ten times as much per capita as Japan. With this
record, Americans want to be sure that no one is taking advantage
of them, and that others establish and maintain comparably open
markets.
To achieve our trade goals we will use all the negotiating
tools
at
our
disposal.
We will negotiate multilaterally
regionally
bilaterally
industry by industry. We insist only
that foreign governments respect our rights under current and
future international agreements. And we will respect theirs. We
seek mutuality of obligation -- and comparability of action: terms
that mean real partnership and mutual responsibility.
Americans are sometimes accused of "unilateralism" when we
insist on enforcement of agreements. But holding countries to
their agreements is the opposite.
Enforcement strengthens
Americans' support for an open trading system -- and it strengthens
the credibility of that trading system as well.
We cannot ask businesses and their workers to take the risks
of doing business in the global marketplace unless we can guarantee
that agreements will be enforced. That is the essence of real
partnership and mutual responsibility.
These principles are reflected in each of our major trade
initiatives.
The Uruguay Round is of primary importance because the General
Agreement on Tariffs and Trade -- The GATT -- remains the
foundation of the global trading system. These negotiations are
now in their seventh year. To restore momentum, we need to make
progress in market access by agreeing to remove the barriers to
trade in manufactured goods, services, and agriculture -- and we
intend to finish the Uruguay Round by December 15.
Some are waiting for the U.S. and the E.C. to show leadership
in this area before making their own contributions. For our part,
we and the European Community have accepted responsibility and have
4
agreed to aim for an outline on market access. We wlll only be
successful, however, if others -- like Japan and the developing
countries -- are full participants.
Recent events indicate that we can work together with the
European Community and move forward to complete the round.
Last January the EC unilaterally imposed community-wide
requirements on government procurement that discriminated against
non-european providers. There seemed no alternative but to impose
sanctions under our law. Last month, after two days of intense
talks, the united states and the EC reached agreement to open up
a major segment of that procurement market to both sides. The EC
will remove the discrimination against U.S. suppliers of heavy
electrical equipment. The United States will remove buy America
preferences on certain federal power administrations, including the
Tennessee Valley authority. We will continue to negotiate on
remaining barriers even as we are imposing sanctions for failure to
open the telecommunications market.
The North American Free Trade agreement, is a second key link
in the trade-and-economy chain. In response to the lowering of
trade barriers in canada and Mexico, and in anticipation of NAFTA,
trade and jobs are on the rise. Exports to Canada already support
an estimated million and a half U.S. jobs. Export jobs related to
Mexico have grown from 300,000 to 700,000 over the last five years,
with another 200,000 predicted by 1995 if NAFTA with the
supplemental agreements is implemented. These jobs pay about 12%
more than the national average. And for 38 of the 50 states,
Mexico is one of the top ten customers. Five of the ten states
selling the most to mexico are northern industrial states. Without
NAFTA, the United States will be unable to lock in and extend these
gains.
The current negotiations are addressing several key areas:
border clean-up -- commissions on labor and environment, with
provisions for enforcement -- import surges -- stronger
enforcement of national laws -- and promoting higher wages and
productivity. In addition, the agreement we send to congress will
ensure that there is adequate adjustment assistance for workers.
Looking beyond the NAFTA, we see good prospects for additional
trade agreements with successful market-oriented economies
throughout the americas, beginning with chile. The combination of
political and economic reform in this region is breathtaking. U.S.
exports to the region are expanding at a rate that is three times
the rate of export growth to the world as a whole.
A high-priority area for this administration is the Pacific
rim. We want to serve as a catalyst connecting the Pacific rim and
the Americas, the two most dynamic regions in the world today.
5
In 1960 the nations of the pacific accounted for 8.9 percent
of the world's gross national product. By the year 2000 the figure
will be nearly 26 percent. Forty percent of current U.S.
international trade is with the Pacific Basin. Last year trade
across the pacific exceeded trans-atlantic trade by fifty percent.
This year the United States is chairing the Asia-Pacific
Economic Cooperation forum, known as APEC. Our hope is that APEC
will provide the framework for expanded trade and an increased
investment flow throughout the region. We intend to work with our
asian partners to further these goals.
When the United States looks to the Pacific, we think first of
Japan. There is no single country more important to our long-term
interests.
For well over a century now, history has bound our two nations
closely together. We have been adversaries and allies. Today, our
alliance is fundamental. Our common interests and our common
challenges are extensive. That's why the issues that divide us
must be openly acknowledged, squarely faced, and ultimately
resolved.
We are now seeking to remove restrictions on access to Japan's
construction and supercomputer markets. These are but two examples
of deep-rooted political, social and commercial practices and
attitudes that gravely distort the workings of a free and open
international trading system.
When Prime Minister Miyazawa visited Washington last month,
President Clinton made it clear that the time has come for Japan to
take more substantial steps to open its market and play a
leadership role commensurate with its economic strength. But we
need to make concrete, measurable progress on a number of sectoral
and structural issues.
Japan and the United States have agreed to identify specific
areas for bilateral negotiation when the Tokyo Economic Summit
convenes in July of this year.
The purposes of our trade policies and actions are the same:
to open markets and create trade opportunities, and in so doing to
boost the global economy, strengthen the international trading
system, and above all, ensure that American workers and american
companies are and will remain competitive. Trade is not a zero-sum
game; it is an engine of growth.
6
This administration will link all the resources at our
disposal to achieve these goals. Whatever programs we have --
export promotion, export finance, trade-related assistance -- are
tools of a comprehensive trade promotion strategy.
The trading system and its supporting institutions must adapt
to the realities of the new global economy.
We will need new assumptions, a whole new set of attitudes on
the part of the United States and its trading partners.
The fundamental fact is that the globalization of production
and markets has changed the nature of international competition.
Self-sufficiency is not realistic. "Imported" goods are no longer
entirely produced in the exporting country; domestic production is
often involved. Trade and investment are closely intertwined.
Similarly, domestic policies and regulations have become as
important to the future of trade as trade measures adopted at the
border. Domestic policies have become major competitive factors in
world trade. Governments are competing to create high-wage, high-
skill jobs through a variety of domestic measures.
These new realities dictate the need to address the
environment, technology, and competition policies. Each of them is
interrelated with trade, and each challenges our trade institutions
to be more creative, open and flexible. Addressing them and other
trade issues will require change.
The United States has always been willing to change. We
embrace change, thrive on change, and depend on change. As the
President has said, we must make change our friend.
After World War I we raised trade barriers, with disastrous
results. After World War II we lowered tariffs and built global
institutions to expand trade and investment even as we held
communism to a standstill.
The end of the cold war is the third decisive moment in this
century. We have a chance to build a new future, and to make it
the brightest and most enduring of all. Instead of a doomsday
clock, with hands pointing toward a nuclear midnight, we want a
"growth clock, with hands pointing toward noon. Instead of
mutually assured destruction we will strive for mutually assured
growth.
7
Together, we need to summon up a small portion of the wisdom,
vision, courage and sense of joint mission that our parents showed
when confronted with the daunting task of defeating fascism,
containing communism, and the rebuilding the postwar world. I
believe we are up to the challenge.
Thank you very much.
Document No. 052543
WHITE HOUSE STAFFING MEMORANDUM
DATE: 2/14/94
ACTION/CONCURRENCE/COMMENT DUE BY:
SUBJECT: REPORT IN RESPONSE TO REQUEST BY THE U.S. TRADE REPRESENTATIVE
ON NOVEMBER 3, 1993
ACTION FYI
ACTION FYI
VICE PRESIDENT
NUSSBAUM
McLARTY
QUINN
LADER
RASCO
ICKES
RUBIN
PANETTA
SEGAL
BAGGETT
SEIDMAN
EMANUEL
STEPHANOPOULOS
GEARAN
TYSON
GERGEN
VARNEY
GIBBONS
WATKINS
GRIFFIN
WILLIAMS
HALE
CLERK
HERMAN
LAKE
LINDSEY
McGINTY
MYERS
REMARKS:
RESPONSE:
JOHN D. PODESTA
Assistant to the President
and Staff Secretary
Ext. 2702
ID# 052543
THE WHITE HOUSE
CORRESPONDENCE TRACKING WORKSHEET
INCOMING
DATE RECEIVED: FEBRUARY 04, 1994
94 FEB 8 P2 :
I
NAME OF CORRESPONDENT: THE HONORABLE DON E. NEWQUIST
SUBJECT: SUBMITS REPORT IN RESPONSE TO A REQUEST BY
BY THE UNITED STATES TRADE REPRESENTATIVE ON
NOV 3 93
ACTION
DISPOSITION
ROUTE TO:
ACT
DATE
TYPE C COMPLETED
OFFICE/AGENCY
(STAFF NAME)
CODE YY/MM/DD
RESP
D
YY/MM/DD
RONALD GEISLER
ORG 94/02/04
C 94/02/08
REFERRAL NOTE:
SSPODE
A 94/02/08
7
/
REFERRAL NOTE:
7
7
7
7
REFERRAL NOTE:
7
7
7
7
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7
7
7
7
REFERRAL NOTE:
COMMENTS: Not for the President's Xmittal to the Congress
ADDITIONAL CORRESPONDENTS:
MEDIA:L INDIVIDUAL CODES:
MI MAIL
USER CODES: (A)
(B)
(c)
*ACTION CODES:
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*C-COMMENT/RECOM
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OF SIGNER
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*D-DRAFT RESPONSE
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CODE = A
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*COMPLETED = DATE OF
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*I-INFO COPY/NO ACT NEC*
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OUTGOING
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REFER QUESTIONS AND ROUTING UPDATES TO CENTRAL REFERENCE
(ROOM 75, OEOB) EXT-2590
KEEP THIS WORKSHEET ATTACHED TO THE ORIGINAL INCOMING
LETTER AT ALL TIMES AND SEND COMPLETED RECORD TO RECORDS
MANAGEMENT.
Ron Geisler
INTERNATIONAL
TRADE
STATES UNITED COMMUNICATIONS
052543
*
UNITED STATES INTERNATIONAL TRADE COMMISSION
WASHINGTON, D.C. 20436
February 3, 1994
The President
The White House
Washington, DC 20500
Dear Mr. President:
The enclosed report, Probable Economic Effect on U.S.
Industries and Consumers of Accelerated Elimination of U.S.
Tariffs on Certain Articles from Canada, is submitted in
response to a request by the United States Trade
Representative on November 3, 1993. In this communication,
Ambassador Michael Kantor asked for the advice of the
Commission with respect to the probable economic effect on
domestic industries in the United States and on U.S.
consumers of the immediate elimination of existing U.S.
tariffs on certain products imported from Canada.
The report contains the information gathered in the
Commission's investigation and its advice as to the probable
economic effect on such action.
Please continue to call on us whenever we can be of
assistance to you.
Sincerely,
Don hearquist
Don E. Newquist
Chairman
Enclosure
Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001. report
re: Probable Economic Effect on U.S. Industries and Consumers of
/02/1994
P1/b(1)
Accelerated Elimination of U.S. Tariffs on Certain Articles from
Canada (49 pages)
COLLECTION:
Clinton Presidential Records
Council of Economic Advisers
Laura D'Andrea Tyson
OA/Box Number: 5062
FOLDER TITLE:
USTR [United States Trade Representative] [2]
2017-0364-F
jp3832
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - [5 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRA]
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b(2) Release would disclose internal personnel rules and practices of
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an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
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financial information [(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
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personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
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C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions [(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells [(b)(9) of the FOIA]
RR. Document will be reviewed upon request.