June 16, 1988
Thank you all very much, and welcome to the White House. I know that sounds strange, but they consider all this part of the White House complex.
But I want to thank each one of you for being a part of the American Coalition for Canada Free Trade, and in particular, let me thank Jim Robinson for taking the lead in this effort. I know you've already heard from Jim Baker and Clayton Yeutter. I think you know the key role that they've played in achieving this historic agreement, which will mean greater jobs and prosperity for generations to come.
If there was ever a case of being on the right side of history, it's certainly true of the Americans and the Canadians who have helped achieve our free trade agreement. I think people on both sides of the border realize that this mutually beneficial agreement is part of a shared destiny, but it's the hard work of people like you, in both countries, who made it happen and who are now helping to finish the job.
And that's reminding me of a story -- things usually do remind me of a story. [Laughter] It can be illustrated. It has to do with an old farmer who had a piece of creek-bottom land and decided one day to make something out of it. It was covered with rocks and brush, and he set to work hauling the rocks away and then grubbing out the brush and all. And then he cultivated, and he fertilized, and he planted. And finally he had the most beautiful garden down there that you've ever seen. And one Sunday morning after church service, he said to the minister -- he was so proud of this -- he asked him if he wouldn't like to come out and see what he'd been doing out there along the creek. And so, the minister came out, and they went down. And the Reverend looked, and he said, "I've never seen anything like it.'' He said, "These melons -- how the Lord has blessed this land. And look at that corn.'' He said, "God has really been good to this place.'' And he went on like that about the beans and everything else that was there, and the old boy was getting pretty fidgety. And finally the minister came to him and said, "Oh,'' he said, "what has happened here with the help of the Lord.'' And the old boy said, "Reverend, I wish you could have seen this place when the Lord was doing it by himself.'' [Laughter]
Well, the truth is that a lot of people have come together behind the free trade agreement. And I'm very pleased by the bipartisan cooperation that we've received in Congress. Actually, even the protectionists could help in their own way. You see, if protectionists in the United States say that the agreement favors Canada, and I could write that down and send it to Prime Minister Mulroney, and he could show that to the Canadian Parliament. And if the protectionists in Canada say it benefits the United States more, then the Prime Minister could copy that and send that to me, and I could show that to our Congress. And I figure with that kind of support coming from both sides of the border we just couldn't lose. [Laughter]
The truth is that the biggest winners in this agreement are the citizens of both the United States and Canada: Both will get more jobs, faster growth, lower prices, and come out miles ahead of the protectionist countries of the world. Under this trade pact, Americans and Canadians, the world's two greatest trading partners, will, by doing business with each other, have an alternative to the tariffs and trade barriers that we both face in doing business with other countries. So, in creating the largest free trade area on Earth, both of our countries can become more competitive.
What the U.S.-Canada agreement accomplishes on a bilateral basis is a tremendous example of what we can, and ultimately must, achieve multilaterally. In that sense, this agreement is a gift to the world. It creates a model that can be imitated and expanded and, ultimately, made universal among free nations.
And America has been performing strongly in world markets. In a report released this week, the Nation's April trade deficit fell by 15.5 percent, bringing it down to $9.9 billion, which is the lowest monthly figure in more than 2 1/2 years. These results continue the progress that's been underway for several quarters. In fact, in the first quarter of this year, U.S. exports in goods and services rose at an annual rate of over 20 percent. Now, this is the kind of good news that I'm delighted to carry to the Toronto summit.
When I meet in a few days with the heads of the major industrial democracies, I will urge that we continue to work together to open our markets. We need to give the Uruguay round of GATT [General Agreement on Tariffs and Trade] negotiations another push forward.
One of the most difficult trade problems facing the United States and Canada is in agriculture. Trade-distorting subsidies are so pervasive around the world that no single nation -- or two nations -- can afford to give up these practices unilaterally or bilaterally. We must seek a multilateral solution.
In the important new areas of trade in services and trade-related investment, the agreement with Canada breaks new ground and shows the way to a multilateral accord. The multilateral trade talks are scheduled to go for 4 years. But we can't afford to let those talks languish now, as we near the halfway point. In Toronto, we, the heads of the major industrial states, should push our ministers to lay down specific goals and a timetable to the finish line by the end of this year -- no excuses. Our goal must be universal free trade among free people and free countries, and that's the shape of the future.
Protectionism has no future; it's a dead and discredited idea. In a global economy, there can be no surer way of impoverishing ourselves than to try to make America go it alone, by cutting us off from trade and investment with the other countries of the world. The protectionists make me think of the story of that Sunday school teacher who asks her class, "Who wants to go to heaven?'' And all of the children raise their hands except for one little boy in the back of the room. The teacher, astounded, says, "Charlie, don't you want to go to heaven?'' And he says, "Yep, but not with this bunch.'' [Laughter]
Well, today, we have a global economy in which the United States is at the very center. We import and export more than any other country on Earth. Of total foreign investment in the world, nearly 40 percent, by far the largest share, consists of Americans investing overseas. But it's not a one-way street. At the same time, the United States also receives more foreign investment from abroad than any other country. So, we truly are the investment capital of the world.
One of the reasons world capital has been drawn to the United States is that we have led the world in reducing tax rates. Back in the 1970's, the top personal income tax rate in the United States was 70 percent. That was even higher than the average of the other leading democracies -- industrial democracies. Well, today, instead of taxing our citizens more heavily than those other countries, our top Federal rate of 28 percent is the lowest, most progrowth, most competitive top personal rate of any of the leading industrial democracies in the world. And when the people around the world see the American economy booming, it's not surprising that they want to join in.
I had that experience. My first time was in Canada at the first summit. My freshman year here was held in Ottawa. And I was kind of a new kid in school. And they didn't listen much if I did talk, and I didn't talk too much and all. But it was a great thrill a couple of years later when our -- economic plan had started working. When I appeared at the table for the next summit meeting, and my six colleagues across the table were looking, and all they wanted to hear was how did we explain the American miracle that was taking place. And I took great delight in telling them about -- well, to follow our lead by cutting taxes and excess regulation and opening things up to freer trade.
America has produced nearly 17 million jobs over the last 5\1/2\ years, putting employment at an all-time high. And we're providing jobs for a larger percentage of our population than any of the other major industrial democracies. Since 1982 we've created jobs in the United States at twice the rate of Japan and Britain, 8 times the rate in Italy, and 14 times the rate of West Germany. So, anyone who thinks that we've somehow lost jobs through trade not only has it wrong, they've got it upside down and backward.
You know, I don't know whether you've known this. I had to get this job to learn that the statisticians have as our potential employment pool everyone in the United States 16 years of age and up, both sexes. Now, that includes all the youngsters still getting education; that includes all of the people retired and everything else. But that's our potential employment pool. And today, when I said the largest rate of employment -- 62.6 percent of that entire pool is employed in America today. I used to get upset not too many weeks ago at some of the Presidential candidates and things that they were saying about how we must do something to get jobs for people.
Well, we're now in the longest peacetime expansion on record, the first in the postwar period in which we've grown faster than most of our major trading partners. And after 65 consecutive months of growth not only have we kept inflation under control but the inflation rate is a good deal lower than it was before the expansion began. And with the American economy booming, not only is the end not in sight but I believe that the best is yet to come. If the progrowth economic policies of the last 7 years are continued, the next decade will be known as the Roaring Nineties.
The U.S.-Canada free trade agreement will help assure that this type of growth and prosperity continues and expands to embrace everyone in our society. Our protectionist opponents do not know how to create real prosperity, so they try to freeze the status quo. It's like a flim-flam version of the $1 million lottery: The winner gets $1 a year for a million years. [Laughter]
Well, what we're offering is the real thing -- real jobs, real growth, real prosperity for America and for Canada. And again, I want to thank you for all that you're doing to support the U.S.-Canada free trade agreement and for taking the time this year to be a part of history. I can't thank you enough, and without you, I don't think we'd be where we are today. I told a few of you just a little earlier today, a few of you, that really what we did that I think made all of this happen was we just got out of your way. As long as I'm around, we're going to keep on staying out of your way as much as we possibly can.
Thank you all, and God bless you.
Note: The President spoke at 2:33 p.m. at a briefing in Room 450 of the Old Executive Office Building. In his opening remarks, he referred to James D. Robinson III, Chairman of the President's Advisory Committee on Trade Negotiations; Secretary of the Treasury James A. Baker III; and U.S. Trade Representative Clayton Yeutter.