President Clinton’s Remarks on NAFTA to the U.S Chamber of Commerce-01/11/1993

Teleconference Remarks on NAFTA to the United States Chamber of Commerce

November 1, 1993

The President. Thank you very much. I’m delighted to see all of you
here and to know that there are people all across the country watching this important
event. I thank the chamber of commerce for organizing this and for
providing the technology that makes it possible. I’m glad to see
Governor Edgar of Illinois here. And I listened intently in the back
room there to my former colleagues, Governor Wilson and Governor Weld,
talk about NAFTA. I want to thank Dick Lesher and Ivan Gorr and Larry
Bossidy for their work through USA*NAFTA and the chamber of commerce to
help us pass this very important piece of legislation. And I think
former Congressman Bill Frenzel, who’s the cochair of our effort, is
here somewhere. I want to thank him for making our bipartisan
administration effort as successful as it’s been.

I know that there are people all over the country here, but if
you’ll forgive me for a little bit of parochialism, I want to observe
that there are 150 people from my home State of Arkansas listening at
the Excelsior Hotel in Little Rock, where we had the economic summit
last December, and one of our good employers I just shook hands with on
the platform up here.

I say that to make this point: Any Governor will tell you that the
job of being Governor today is the job of getting and keeping jobs and
educating and training people to do them. That is the lion’s share of
the work, on a daily basis, of doing that job. For a dozen years, it was
my job to try to deal with the pressures of global competition, the
enormous economic difficulties of the 1980’s. When plants closed, I knew
people’s names who ran the plants and worked in the plants. When people
closed their plants and went to Mexico, I knew about them. And I was
proud that of the three or four we lost when I was Governor, we actually
brought one back before I left office. It made me feel that in part, we
had squared the circle.

The point I want to make is this: Anybody who has ever dealt with
these issues knows that most of the arguments being raised against NAFTA
today are arguments being raised about economic forces and developments
that occurred in the past. And anybody who has ever read the agreement
knows that if you don’t like it when people shut plants down and move to
Mexico, that this agreement will actually make that less likely. And if
we don’t pass it, it will do nothing to stop what people who are
complaining about it are complaining about.

I would never knowingly do anything that would cost an American a
job. My job is to try to recover the economic vitality of this country
by working in partnership with the private sector. It is important, it
is imperative that we make it clear to the American people, first of
all, that you ought to look at what this agreement does: It helps to
alleviate the problems that led to so many jobs moving out of our
manufacturing sector, either into machines or offshore, whether to
Mexico or to other places.

I want to acknowledge that in Cincinnati today, Congressman David
Mann is there with 130 people at the General Electric aircraft engine
plant. I think if NAFTA passes we’ll not only sell aircraft engines from
Cincinnati, we may even sell some of that Cincinnati chili, too. In
Seattle there are 100 people in attendance at the Lake Washington
Technical College. One in six jobs in the State of Washington are
related to trade today, and by the time most of the students at that
college hit their stride, even more jobs will be dependent on trade.
I have to tell you that again I have heard all the debates on this
issue. I have listened carefully to the opponents and the supporters. I
have never heard anyone seriously argue that a great country with a high
per capita income can expand its incomes or its jobs without expanding
trade. There is simply no way to do it. There is no example anywhere now
of a country that can grow more jobs without selling its products beyond
its borders. And that, in the end, is the most important lesson we have
to learn if we’re going to make a good decision about NAFTA.
When I became President, I had a very clear set of priorities in my
mind about what I thought we ought to do with this economy. I knew we
had to try to bring the deficit down and get interest rates down. And
it’s immensely gratifying to have the lowest home mortgage rates in 25
years, the lowest 30-year rate since we’ve been calculating them come
out in the last few months, to know that the deficit came in $55 billion
less this year than we were told it would be on January 20th. But I also know that
even though there are indications that we see an increase in investment
in homes, in cars, in long-term investments by businesses, in the end
this economy will not grow unless we sell more of our products and
services beyond our borders. We cannot simply create a healthy economy
only by changes here.

The other day we announced our new export initiative, which among
other things removed over $35 billion worth of high-tech equipment from
export controls and opened those things to the international market,
computers, supercomputers, telecommunications equipment. Someone has to
buy them. In the last 2 years, Mexico has gone from purchasing 390,000
to 600,000 computers, just from one year to the next. But 600,000 in a
consumer market of 90 million men, women, and children is not so many.
Think what will happen when the barriers, the tariffs, go down, when
there is no 20 percent tariff barrier. And think what it will be like
when that tariff barrier is down for us but not for our major
competitors. We’ve been on the opposite side of that fence a lot of
times. Now we’re going to be given preferential treatment in a market
that we’re going to help develop. It’s a very, very important issue.
I want to say to all of you that if we don’t approve NAFTA, it will
weaken our ability to get a General Agreement on Tariffs and Trade
passed by the end of the year. If we do approve NAFTA, it will not only
put us in a stronger position with Mexico and with all the rest of Latin
America, it will help us to say to our trading partners in Europe and in
Asia what we really need is to continue to expand trade worldwide.
The real job gains in NAFTA come not just from passing NAFTA,
although we are convinced it will create 200,000 new jobs by 1995. The
real job gains come when we take that NAFTA agreement and we take it to
Chile, we take it to Argentina, we take it to Colombia, we take it to
Venezuela, we take it to the other market-oriented democracies in Latin
America and enable us to create a consumer market of over 700 million
people, soon to be over one billion people, early in the next century,
and we use that leverage then to say to our friends in Asia and our
friends in Europe that it’s okay for you to have trading blocs but we
need to open up trading worldwide. We need that. If we don’t pass NAFTA,
our leverage to get that done will be much more limited.
So I say to all of you it is important not only on its own terms,
but this issue has acquired an enormous significance because of the
advantage it will give us in the Mexican market over our competitors in
Japan and Europe and because of the leverage that will then give us to
get a worldwide trade agreement that the world desperately needs to
restore global growth. Without that, we’re not going to be able to sell
our products; we’re not going to be able to create more jobs; we’re not
going to be able to see our workers’ incomes go up. With it, we have the
prospect of having several years now of sustained, vigorous economic
growth because we are getting control of our economic house; we are
putting things in order; we are getting our priorities straightened out
in this country; we are focusing on investment and on training. We have
to have the markets.

Now let me just say one final thing about this. I think if there
were a secret vote in the Congress today, we would win. Now, that’s a
big issue, winning the secret ballot. I say that not to criticize anyone
or to put anyone down but to recognize that the pressures against NAFTA
are enormous. But they reflect, as I have said many times in many
places, the accumulated frustrations and grievances and insecurities
people bring to this day in American history. More and more people are
worried about losing their jobs. More and more people know if they lose
their jobs, they won’t get it back. That’s true. That’s true. We have an
unemployment system premised on a set of conditions that no longer
exist, you know, you lose your job, and then the recession’s over and
your old company hires you back. That only happens about one in five
times now.

So there is all this uncertainty out there in America today. I
understand that. And our administration has done what we could to try to
alleviate the insecurities of the American working families. The family
leave law was designed to say to people, “You can be a good worker and
a good parent.” The attempt to control health care costs and still provide health care for everyone is
an attempt to say, “Yes, you may lose your job, but at least your
family can be taken care of.” The attempt that the Congress is making
now on a bipartisan basis to pass a new crime bill is a way of saying,
“We know you have to feel safer on your streets. If you work hard and
play by the rules, you shouldn’t worry about having your children shot
going to and from school.”

But with all of this, we cannot turn away from the global economy
that is engulfing us. And what I want to ask all of you to do, every one
of you listening to me today, is to think about what you can do between
now and November 17th, either directly by contacting a Member of
Congress or indirectly by getting employees or friends or others to
contact Members of Congress to say, “We know America can compete and
win. We are not going to turn tail and run. We have not given up on
America.”

The Mexican economy may have 90 million people, but today it is the
size of California from Los Angeles to the Mexican border. The idea that
America is just going to shrivel up if we adopt this trade agreement is
ridiculous. This trade agreement is a door that opens all of Latin
America to us. It is a lever that will open a broader trading system in
the world to us. And we cannot run away. We’ve got to compete and win.
You have to be, in other words, the engines of confidence in our future.
And employees, people who work with you who understand this, can have a
huge impact on turning what is now only a secret ballot victory on NAFTA
into a public victory on November 17th.

This is a difficult time for America. And it’s hard for people to
have confidence when they’ve been battered and pushed around and
worried. But we cannot turn away from the future that is there before
us. I honestly believe the next 20 years could be the best 20 years this
country ever had if we have the courage and the vision to take advantage
of the end of the cold war, the continued efforts to reduce nuclear
arms, the fact that economic competition may expand opportunity for
everyone if we do it right.

When we started, NAFTA had a significance for those who were
fighting against it all out of proportion, all out of proportion to the
impact it could have. You saw on that film there are several unions,
many major unions in this country, who are going to gain jobs if this
passes. But they decided that NAFTA would be the receptacle in which all
the resentments and fears and insecurities of that last 12 to 20 years
of stagnant wages and economic difficulties would be poured.
It has acquired a symbolic significance for those of us who are for
it, too. This is a huge diplomatic, foreign policy, and economic issue
for America. You simply cannot divide domestic and foreign policy
anymore, as you once could. This is a major thing for the United States.
If we walk away from this, if we walk away from this and Mexico decides
to pursue its development strategy, what must it do? It must make this
deal with Europe or with Japan. And what would that do? That could
change the purchasing habits of 90 million Mexicans and hundreds of
millions of people in Latin America. It could cut us off from not only
economic but political opportunities to promote democracy and freedom
and stability in our hemisphere that we can now only imagine.
If we embrace it, we not only will get in the immediate future a
competitive advantage in selling into the Mexican market, a way of
embracing all of Latin America, but the security of knowing that America
is still marching in the right direction, that we are on future’s side,
that we are grasping for a time when our people will be able to compete
and win in a global economy that will be less protectionist, more open,
more full of opportunity, and more full of peace and democracy. This is
a huge issue.

So I will close with this plea to you. This is not exactly like a
church service. I know I am preaching to the saved, as we say at home,
but you all have to be missionaries. We only have 17 days or so. We need
you to go out and make sure that your Members of Congress, every man and
woman in the Congress that you can reach, is contacted by real people
who say, “My life will be better.” I don’t know how many Members I’ve
heard from both parties saying, “All the organized vote is against
this. I’d just like to hear from a few people who will rationally tell
me that their lives will be better and that our country will be better off and that our district will be better off.”
Please do that. Don’t miss a chance to do it. Don’t wake up on the
morning of November 18th and wish that you had done something to give
America a brighter future; to give our hemisphere a more solid, more
democratic, more market-oriented future; and to open up the future in a
way that is worthy of our country and that I am convinced is absolutely
essential for our long-term success. We need your help. Many of these
Members, you can have more influence on them than I can, because I can
only vote in one congressional district every 2 years. You can vote in
all of them. We need your help.

Thank you very much.

Meryl Comer. Ladies and gentlemen, the President has agreed to take
some questions. Behind you are small business owners. They all are
wearing NAFTA buttons, but there’s one man who’s wearing an attitude
button as well. Would you like to ask the President a question?
[At this point, a participant requested the President’s response to
people who favor protectionism.]
The President. I respond in two ways. Number one, most of those
people believe that all managers make all decisions based on labor
costs. If that were true, what you would be reading this morning about
Haiti is not whether a police chief and an army guy want to make it even
poorer, even though it’s already the third poorest country in the world.
What you would read is that Haiti had all the manufacturing jobs in
America, right? I mean, if this were a case of low wages, the headlines
on Haiti today would be “General Motors shuts down in Michigan,”
“Caterpillar leaves Illinois, goes to Port-au-Prince,” right? Number
one, it’s not factually true that labor costs or environmental
investments are the only thing involved. Germany, which has a trading
system arguably more open than ours and higher labor costs, has almost
one-third of its work force in manufacturing, almost twice the
percentage we do. It’s simply not true. How well you do in production of
goods and services depends upon how productive you are, how well-
organized you are, and whether you can sell.

The second thing I would say is there is this fear, because of
what’s happened to us, because we’re going through this wrenching
restructuring, that is emotional, that we can’t compete and win anymore.
And that’s just not true either. We’re going to have to be able to suit
up and go out and play and win. That’s the attitude issue: Do you
believe that this country can win or not? I mean, we’re gaining back
market share in autos, American autos, shoving our foreign competitors
out of the American market because of quality and price. And there are
lots of other examples. Our manufacturing productivity’s gone up now for
a dozen years at an annual rate of over 4 percent a year. This is nuts,
this idea that we can’t compete and win. It is true we’re having trouble
creating large numbers of new jobs. That is true for every wealthy
country in the world. We have to solve that problem. But no one can
solve it without more markets.

Those are my answers, and I thank you.
Ms. Comer. Please raise your hand for questions. Mr. President,
while I’m trying to find a question, there’s a gentleman who got up at 3
this morning, milked the cows, and came because he cares about NAFTA. If
you shook his hand he’d have stories to tell for years. He’s right
behind you in the white shirt.

The President. Where is he? I want to say this before you get to the
question: That man is a dairy farmer, and sometimes I feel sorry for
myself–if you think you work hard, you ought to start a dairy farm.
It’s a 24-hour-a-day, 7-day-a-week job. I never could figure out how any
of the dairy farmers in my State even made it to their kids’ high school
graduation. But I thank you for coming here today.
[Another participant asked about the economic impact if NAFTA is not
passed.]

The President. Let me say, first of all, to the opponents of NAFTA,
you can’t name a single solitary thing you don’t like that wouldn’t
continue to happen at maybe a greater pace if it fails. So you don’t
gain anything by beating it, for the people who are against it.

In addition to that, if Mexico follows the same strategy–let’s ask
rationally, what do they get out of this deal? If it’s such a good deal
for us and we sell even more consumer products–they are already the
second biggest purchaser of American products in the world, even though
they’re by no means a wealthy country. They buy more per person than any
other country in the world except Canada. What do they get out of it?
They get development capital, not to invest to export back to the
American market but to build up Mexico. That’s what they get.
Now, if they stay with that strategy and we turn them down, what do
you think they’re going to do? There’s only two places they can get it.
They can make the same deal with Europe or the same deal with Japan,
which means they will give them preferential access to their market
instead of giving us preferential access to their market. Which means
that you, sir, will have to face a 20 percent disability, if you want to
sell into the Mexican market, against either the European people doing
more or less what you do or the Japanese business people who do. That’s
exactly what’s going to happen.
In addition to that, we will probably see a reversal of the good
feeling that now exists for the United States in Mexico and throughout
Latin America and the opportunity to do this same deal with other
countries–I mentioned a few, Chile, Argentina, Colombia, Venezuela;
there are others–none of whom will be getting investment to export back
to the American market, but all of whom will buy more American products.
Those opportunities will also be lost.
So, this is a good deal for this country. And not doing it,
conversely, is a very, very dangerous strategy. It’s a dangerous
strategy economically; it’s dangerous politically. It will hurt us in
the short run, and it will hurt us for 20 years. I am convinced it is a
terrible, terrible mistake.
Ms. Comer. Do you have time for one more, Mr. President?
The President. Sure, I’m with you.
Ms. Comer. This gentleman flew all the way in from California. He
didn’t want to talk to the Governor, he wanted to talk to the President.
Please go ahead.
[The participant asked if NAFTA would increase illegal immigration.]
The President. It won’t. There’s no evidence that it will. I can’t
even figure out that argument. I stayed up late trying to figure that
one. I can’t figure it out.
To be fair, let’s talk about it. There is a sophisticated argument
that development in Mexico increases immigration to America. And let me
tell you what it is and then say why NAFTA makes it better. Most of the
people who immigrate from Mexico to the United States illegally are
looking for jobs. Some are looking for welfare, but most are looking for
work. When we set up the maquilladora system along the Mexican border–
which, after all, was set up by our Government to help Mexico develop,
right?–the idea was you could go down there and put up a plant and then
export back to the United States duty-free. So a lot of people who don’t
have access to other jobs in other parts of Mexico come up there, they
work in the maquilladora plant, but they can make more money in America.
Or they come looking for a job, they don’t get it, so they just–it’s
very close to the border. So you could argue that the maquilladora
system has perversely increased illegal immigration.
How will NAFTA reverse that? It erases the maquilladora line. This
will permit investment to occur in Mexico City and south of there. This
will permit a balanced development approach so there will not only be
more jobs and higher incomes, but they’ll be strewed out all over the
country instead of right there on the American border, all of which will
reduce illegal immigration long-term.
Also, since you said that, if NAFTA passes we will get much more
cooperation from the Mexican Government in enforcing our immigration
laws and our drug laws. There’s no question that we’ll get a higher
level of cooperation on both those very important issues if this passes.
Thank you.
Ms. Comer. Was that answer worth your trip?
Q. Absolutely perfect. And I’ll go home and tell—-
The President. Don’t you think it’s right—-

Q. You’re absolutely right. And I’ll go home and tell the story for
you.
The President. Thank you.
[A participant asked why many Americans feel U.S. businesses cannot
compete.]
The President. Again, you see, I don’t agree with it. But we have
lost a lot of manufacturing jobs in the last 20 years. We’ve been losing
manufacturing jobs for 35 years. But the percentage of our economy
devoted to manufacturing is just what it was 12 years ago. In other
words, what’s happening is we’re doing just what happened in
agriculture, going back to the beginning of this century. You’ve got
fewer people increasing their productivity and therefore increasing
their output. That doesn’t mean we can’t compete, it means we have to
get more and more productive to compete.
Now, here’s my argument to the people against NAFTA. Let’s say we’ve
got 16 percent of the American work force in manufacturing today–it is
16 to 17–producing about 20 percent of our national wealth. And let’s
say that 15 years ago, I can’t remember, but let’s say 15 years ago it
was about 23 percent–I think that’s about what it was–producing 20
percent of our national wealth. If you want to go back to 23 percent,
what do you have to do? You have to make more things and sell them to
more people.
I will say it again: Germany, a country with a shorter work week and
higher labor costs but extraordinary productivity in manufacturing, has
almost a third of its workers in manufacturing. Now, do they account for
20 percent of the wealth in Germany? No, they account for about 40
percent of the wealth. So if you want to do more in manufacturing or in
services or in agriculture or in anything else, you have to have
somebody to sell to.
So people have missed the–they assume that when the number of
manufacturing workers go down, that the production’s going down because
nobody’s buying it. In fact, production is just where it was. It’s just
that more people are more productive.

So my answer to those folks is, if you want more people to work in
manufacturing again, find more customers. There is no other way to do
it. Find new products and more customers. This gentleman here in the
environmental area, one of the things we’re trying to do is to take a
lot of these defense companies that are losing their defense contracts
and do partnerships with the Federal Government to give them the time
they need to develop new technologies. You have to find different
products and more customers. There is no other way. It has nothing to do
with lower wages. That’s not what the problem is.
Ms. Comer. Mr. President, your friends from the Excelsior Hotel are
trying to reach you.
The President. I may owe some money–[laughter]
Ms. Comer. They’ve gotten to you by fax. It’s your Arkansas NAFTA
coalition assembled at the Excelsior Hotel. How is that hotel?
The President. It’s a very nice hotel.
Ms. Comer. Okay. All right.
The President. Also to give you–it happens to belong to some
Japanese investors who employ a lot of Arkansans. I mean, I think that’s
the world we’re living in. We can’t run from it. We ought to embrace it
and figure out a way to win in it.
Ms. Comer. Here is their question, Mr. President: If NAFTA fails,
isn’t it reasonable to expect that Japan and the European Community will
step into Mexico and take much of the market away from the U.S., thereby
costing U.S. jobs, not saving them?
The President. Well, I’ll tell you what I would do. If I were the
Prime Minister of Japan and I had a low growth rate and I had my
companies going crazy because they have hidden unemployment, since they
have in theory lifetime employment–so they’ve got about 7 percent
unemployment, but it only scores at 2.5 percent, which means all those
companies are carrying idle workers on their books–I would jump on this
like flies on a junebug. I would be there on the next day. If Congress
votes this down on the 17th of November, I would, if I were the Prime
Minister of Japan, have the Finance Minister of my country in to see the
President of Mexico on the 18th of November. That’s what I would do. I’d
say, “We’ve got more money than they do anyway; make the deal with
us.” That’s what I would do. And if I were running the economic affairs
of the European

Community, I would do that same thing because it’s a new market for them
at a preferential rate, so they can actually push us out of a new market
that we’re already well established in. That’s what I would do; that’s
what I think will happen. That’s what you’d do, too, isn’t it? If you
were running—-

Ms. Comer. Mr. President, you remember the budget vote?
The President. I do. As the Vice President says, whenever he votes,
he always wins. [Laughter]

Ms. Comer. The speculation is that it’s going to come down to a
pretty close vote, so I was trying to see whether or not you might have
the same feeling about this vote that you had about the budget vote.
The President. I’ll tell you what I think will happen. I think it
will pass for the same reason the budget passed. I think what will
happen is people will get up to the point of decision, they will look
over the abyss, Members of Congress who have been subjected to
unbelievable pressure, and they will think, “Can I actually do this to
my country? What are the consequences of not doing this?”
Now, you can say whatever you want to about the details of the
budget, it’s hard to argue with the conclusions. We’ve now got very
stable long-term low interest rates. We’ve got investment going back up
in the country. We’ve got America being complimented instead of
condemned by the Europeans and the Asians for getting control of our
budgetary affairs. That’s what the Members of the Congress knew. So
finally, they had to swap and squall and break, and everything happened,
but we got enough votes to pass the thing. So, that’s what I think will
happen with NAFTA.

But let me say this, in order to win by a vote or two or three or
four, you have to be close so that there is a magnet leading people to
take the right decision. If the Members of the Congress who are under so
much pressure from organized groups, whether it’s the Perot crowd or the
labor groups, if they sense that it’s not close, they might run away
from it in great numbers, which is why your efforts are so important. I
honestly believe it will pass, but you need to understand, that is the
dynamic that will operate in the Congress.

Let me also say that one of the things that I think is worth
pointing out is we all know who’s against NAFTA, but it’s worth pointing
out that 41 of the 50 Governors have endorsed it–and they make their
living, without regard to party, they make their living creating jobs,
keeping jobs–12 Nobel Prize winning economists, and every living former
President. I had several of them at the White House the other day, and
we were trying to figure out if there was any other issue on which all
of us have ever agreed. [Laughter] Maybe something else equally
controversial, who knows. But I think that’s important.
So, that’s the answer. The answer is yes, I remember the budget
vote. Yes, it could be close. But in order for it to be close, you all
have to push between now and then. If it’s close, I think we’ll win. If
they perceive it’s not close, then you’ll see a big movement away from
it just to avoid making anybody mad who’s arguing to vote against it.
Ms. Comer. Thank you, Mr. President. They’re here to help you. And
thank you so much for your time.

The President. Thank you very much.

Note: The President spoke at 12:35 p.m. at the U.S. Chamber of Commerce, and his remarks were broadcast via satellite. In his remarks, he referred to Dick Lesher, chamber president; Ivan Gorr, chamber chairman and CEO and chairman, Cooper Tire and Rubber; and Larry Bossidy, chairman, USA*NAFTA, and CEO, Allied-Signal, Inc. The teleconference was moderated by Meryl Comer, chamber vice president of community development.

NAFTA-North American Free Trade Agreement