July 12, 1982

To the Congress of the United States:

I am pleased to submit this Twenty-Fifth Annual Report on the Trade Agreements Program 1980/81. In accord with Section 163 of the Trade Act of 1974, it provides detailed reports on specified trade-related programs. In addition to reporting on the full 1980 calendar year, this Report presents new trade policies and activities the Administration has undertaken in the Fiscal Year 1981.

As the U.S. economy has become more international in the past decade, foreign trade has an increasingly important role to play. The value of exports increased fivefold in the past ten years so that now 19 percent of U.S. goods is sold abroad. In 1980, five million jobs were related to exports; up from 3.5 million jobs in 1970. Because of the importance of foreign trade to the U.S. economy, support for a more open trading system is the cornerstone of our trade policy. This Report begins with a comprehensive statement of U.S. trade policy reaffirming both our commitment to trade liberalization and our resolution to secure compliance with international trade law and agreements on the part of our trading partners.

For this policy of open markets to be effective, U.S. firms need to be assured that foreign markets are free from barriers and distortions. This report relates how we have dealt with violations of this nature in our bilateral relations with our trading partners, and in our participation in multilateral fora, such as the OECD and the GATT. We will continue to be vigilant in identifying distortions relating to trade and investment, such as export subsidies, export performance and local content requirements, creeping bilateralism, and excessive use of safeguards. We will be persistent in resisting the use of such practices by our trading partners, and insist on their adherence to international trade laws and responsibilities. We will also be identifying important new areas of the world economy that are ripe for formal international trade disciplines, especially in service sectors.

Trade liberalization is the responsibility of all nations, although the differing levels of development may make it difficult to define the equitable reductions in tariff and nontariff barriers that developing countries should undertake. We are convinced that trade can have greater leverage for improving their economies and their relations with us than development assistance. In 1980, for example, earnings from trade with the United States were twice the value of aid received from all bilateral and multilateral sources by the non-OPEC developing countries. As these countries evolve into mature international traders capable of greater liberalization, we will encourage their adoption of more fully reciprocal conditions of trade with us.

Equally challenging is the development of equitable trade relations with the nonmarket economies. With these countries, the United States seeks to develop mutually beneficial commercial relations in the context of responsible international political behavior.

The process of liberalizing trade and extending international disciplines is a challenging one, but it is one that offers important opportunities to improve the economic welfare of our own country as well as realize our national commitment to promoting economic development abroad.

Ronald Reagan

The White House,

July 12, 1982.

Note: The report is entitled ``Twenty-fifth Annual Report of the President of the United States on the Trade Agreements Program -- 1980 - 1981'' (Government Printing Office, 199 pages).