    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book I)]
    [January 26, 1995]
    [Pages 93-95]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks to the World Economic Forum
    January 26, 1995

        Good evening, and thank you, Professor Schwab, for that
    introduction. I'm pleased to join all of you, especially Secretary-
    General Boutros-Ghali, Councillor Cotti of Switzerland, and Prime
    Minister Carlsson of Sweden. And I'm delighted to have this opportunity
    to speak to the World Economic Forum.
        Let me begin by saying I've very much enjoyed listening to the
    questions you asked the Secretary-General and to his answers. I was
    profoundly moved by the wisdom of his answer about the media. I wrote it
    down, and now I will use it in the next press conference. I noted you
    also talked about the academic wisdom and the media power represented in
    your group. I hope also there is academic power and media wisdom in your
    group.
        The thoughts that you shared and the projects that grow out of your
    meetings clearly are going to play a vital role in determining the
    issues that dominate all of our international agenda. Your opinions will
    play a key part in shaping the debate on some of the most important
    issues of our time.
        Two years ago, I took office with the strong conviction that the
    American people, as all the people of the world, were facing a new and
    rapidly changing global economy. I believed then, and I believe more
    strongly now, that the incomes and living standards of Americans are
    tied directly to what happens outside our borders. It is now impossible
    to separate international and domestic economic concerns. As soon as our
    administration began its work, we devised a detailed strategy to set a
    new direction. And during the last 2 years, we have devoted ourselves to
    preparing our country and our people for this global economy and to
    creating an international system of free and expanding trade that
    benefits not just the American people but all the world's people.
        We've made good strides. The essential first step for us was to put
    our own house in order. Let's not forget that, 2 years ago, it was a
    very open question whether the United States could summon the political
    will to cut our deficit significantly. But as many of you who specialize
    in global economics had urged for years, we changed that dynamic. We did
    the hard work. We cut the deficit dramatically, more than $600 billion,
    or about $10,000 for every family in our country.
        This year, the deficit will shrink for the third year in a row, for
    the first time since Harry Truman was the President of the United
    States. Cutting the deficit has helped us to create almost 6 million new
    jobs in the last 2 years, to keep the inflation to 2.7 percent and to
    boost our exports by 11 percent. The combined measure of unemployment
    and inflation is at its lowest point since 1968. In fact, a survey of
    your own members last year concluded that the United States is now the
    most competitive economy on Earth, and we appreciate that, and we're
    going to do our best to keep it that way.

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        To ensure that, we know we must continue to invest in our own
    people, to empower individuals to take advantage of the opportunities of
    the global economy and to make the most of their own lives. Today, when
    exports account for so many of our high-skill, high-wage jobs and when
    what we earn depends so directly on what we know and what we are capable
    of learning, education is more important than ever before.
        That's why I proposed as part of my middle class bill of rights,
    that we make education and training more accessible than ever before in
    the United States, through a range of tax cuts for students of all ages
    and through a system of cash vouchers for people who have been laid off
    and must be retrained. Another part of our strategy has been to lay the
    foundation for a new era of global growth and open markets in the
    century to come.
        Already, after 7 years, we've made some real progress by adopting
    the GATT treaty. Those negotiations were begun here in the United States
    under Presidents Reagan and Bush. They were completed, they were
    approved by Congress, and I was proud to sign them into law last year.
    That's the most ambitious trade agreement ever.
        We also brought the NAFTA treaty into force with support from both
    Democrats and Republicans, and since then, trade with our NAFTA partners
    have accounted for 100,000 new American jobs. On the basis of the
    agreement forged at the Summit of the Americas last month, we've begun
    to create a free trade zone for our own hemisphere. And finally, we've
    extended our efforts to the booming economies of the Asia-Pacific
    region. At the APEC summit in Jakarta, we forged an agreement to create
    a vastly more open trade area there by 2020. All told, these 2 years in
    the United States have been one of the most intense and productive
    periods of economic innovation, both domestically and internationally,
    in recent times.
        But while the promise of these new arrangements is clearly enormous,
    their benefits will not simply fall into our lap. Indeed, with the
    completion of this array of trade agreements, we're entering a new and
    difficult phase of the global economy. Now, we face the challenge of
    turning visions into concrete realities, a time for painstaking efforts,
    for dismantling the old barriers and creating the new arrangements,
    brick by brick, for implementing these new trade pacts and completing
    the architecture of the international economy.
        It's also a time for careful reform. We must reexamine the
    international institutions that have played such an important role in
    the post-war era and consider how they are adapting to the new
    realities. These institutions have served us well for nearly half a
    century. In many respects, they still do. They have evolved with the
    changing world economy, discarding old missions and assuming new ones.
        But as all of you know, change in the world economy has taken on
    astonishing dimensions. Globalization has met the growth in
    interdependence on a scale that would have been inconceivable a decade
    ago, that richly rewards good decisions and good policies. But we've
    also seen that 24-hour markets can respond with blinding speed and
    sometimes ruthlessness that the statesmen of the Bretton Woods era never
    would have imagined.
        And for that reason, at last year's summit in Naples, my G-7
    colleagues and I saw the need to review our international economic
    institutions, identifying new needs and evaluating how best to adapt the
    institutions to meet the tremendous challenges of the 21st century. This
    review will be a central part of our discussions at the Halifax summit
    in June.
        In just the last few weeks, the crisis in Mexico has reminded us
    that the road ahead will have its difficult stretches. Mexico today has
    an economy with strong fundamentals and a capacity to grow and to meet
    its obligations. But partly because Mexico relied on too many short-term
    foreign loans, a fallen market confidence turned into a dangerously
    self-fulfilling prophecy.
        I am confident that the guarantee program we are putting together to
    put Mexico back on track will win approval in our Congress and will make
    a difference in the world economy. The combined leadership of the U.S.
    Congress, the Chairman of the Federal Reserve Board, and the Secretaries
    of Treasury and State are constructing a creative and unprecedented
    package. Some have said it's just foreign aid and a bailout. Well,
    they're not right. It's the kind of response to address a problem before
    it spreads that the new world economy demands.
        Failure to act could have grave consequences for Mexico, for Latin
    America, for the entire developing world. More important, our approach
    will safeguard hundreds of thousands of Americans whose livelihoods are
    now tied to Mexico's

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    well-being. So it's the right thing to do for the rest of the world, but
    it's also the right thing to do for America.
        The crisis in Mexico has helped to show us again just how much
    smaller our world has become and how our stake in what happens in other
    countries has dramatically increased. This is not just true for economic
    affairs but also for a whole range of other problems, like attacking the
    capital movements by drug cartels and organized crime, dealing seriously
    with the interconnection of global terrorisms or environmental policies
    that have regional impact or social policies that bear on the global
    population issue.
        The challenge before us is to adapt our international institutions,
    to deepen the cooperation between nations so that we can confront a new
    generation of problems that know no national borders. Indeed, the job of
    constructing a new international economic architecture through our trade
    agreements and the revitalization of our institutions is, for our
    generation, as pressing and important as building the postwar system was
    to the generation of the Marshall plan and Bretton Woods, the heroic
    generation of Dean Acheson and Jean Monnet. Then, they had the immense
    job of proving that democracy and capitalism could provide for
    fulfilling and meaningful lives in the aftermath of war and in the face
    of the rival system of communism. Today, our job again is to persuade
    people that democracy and free markets can give all people the
    opportunity to live out their dreams, but we must do so without the prod
    of a rival political system to contend with or the fresh memory of war
    to spur us on.
        Today, as never before, we can see the extraordinary possibilities
    that lie before us in the 21st century. It promises to be an era in
    which free people, working across open borders, will have a chance to
    create growing prosperity, economic security, to fulfill their God-given
    potential and their dreams as never before in human history. But it
    won't happen without hard work, real dedication, and clear vision.
        I am glad to be speaking to this group at Davos because you are
    exactly the kind of people who must help make certain that the
    international system we build works fairly and safely. We must rise to
    the example of our predecessors. We must forge a system that will
    benefit the people of all walks of life and all parts of the globe, not
    just those for whom the global economy now holds the very richest
    opportunities.
        We must do it because it's the right thing to do, because it's the
    fair thing to do, and because, ultimately, it is clearly in all of our
    best interests.
        Thank you very much.

    Note: The President spoke by satellite at 12:47 p.m. from Room 459 of
    the Old Executive Office Building to the meeting in Davos, Switzerland.
    In his remarks, he referred to Klaus Schwab, World Economic Forum
    founder; United Nations Secretary-General Boutros Boutros-Ghali; Falvio
    Cotti, Chief, Department of Foreign Affairs, Switzerland; and Prime
    Minister Ingvar Carlsson of Sweden.