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FOIA Number: 2017-0364-F FOIA MARKER 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 Subseries: OA/ID Number: 5062 FolderID: Folder Title: USTR [United States Trade Representative] [2] Stack: Row: Section: Shelf: Position: S 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 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] b(1) National security classified information [(b)(1) of the FOIA] P2 Relating to the appointment to Federal office [(a)(2) of the PRA] b(2) Release would disclose internal personnel rules and practices of P3 Release would violate a Federal statute [(a)(3) of the PRA] an agency [(b)(2) of the FOIA] P4 Release would disclose trade secrets or confidential commercial or b(3) Release would violate a Federal statute [(b)(3) of the FOIA] 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] b(6) Release would constitute a clearly unwarranted invasion of P6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA] personal privacy [(a)(6) of the PRA] b(7) Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA] 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. APR- 7-94 THU 17:58 CNTR FOR NATL POLICY FAX NO. 2025465789 P.02 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 CNTR FOR NATL POLICY FAX NO. 2025465789 P. 03 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 CNTR FOR NATL POLICY FAX NO. 2025465789 P. 04 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 CNTR FOR NATL POLICY FAX NO. 2025465789 P.02 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 APR- 7-94 THU 16:58 CNTR FOR NATL POLICY FAX NO. 2025465789 P.03 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 APR- 7-94 THU 16:59 CNTR FOR NATL POLICY FAX NO. 2025465789 P.04 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 APR- 7-94 THU 16:59 CNTR FOR NATL POLICY FAX NO. 2025465789 P.05 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 APR- 7-94 THU 17:00 CNTR FOR NATL POLICY FAX NO. 2025465789 P.06 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 APR- 7-94 THU 17:01 CNTR FOR NATL POLICY FAX NO. 2025465789 P.07 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 CNTR FOR NATL POLICY FAX NO. 2025465789 P.09 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 REFERRAL NOTE: 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: *DISPOSITION *OUTGOING * * * *CORRESPONDENCE: * *A-APPROPRIATE ACTION *A-ANSWERED *TYPE RESP=INITIALS *C-COMMENT/RECOM *B-NON-SPEC-REFERRAL * OF SIGNER * *D-DRAFT RESPONSE *C-COMPLETED * CODE = A * *F-FURNISH FACT SHEET *S-SUSPENDED *COMPLETED = DATE OF * *I-INFO COPY/NO ACT NEC* * OUTGOING * *R-DIRECT REPLY W/COPY * * * *S-FOR-SIGNATURE * * * *X-INTERIM REPLY * * * 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] b(1) National security classified information [(b)(1) of the FOIA] P2 Relating to the appointment to Federal office [(a)(2) of the PRA] b(2) Release would disclose internal personnel rules and practices of P3 Release would violate a Federal statute [(a)(3) of the PRA] an agency [(b)(2) of the FOIA] P4 Release would disclose trade secrets or confidential commercial or b(3) Release would violate a Federal statute [(b)(3) of the FOIA] 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] b(6) Release would constitute a clearly unwarranted invasion of P6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA] personal privacy [(a)(6) of the PRA] b(7) Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA] 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.