    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book I)]
    [May 19, 1997]
    [Pages 619-624]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks to Young Presidents and World Presidents Organizations
    May 19, 1997

        Thank you very much. Please be seated. First of all, welcome back to
    Washington. I'm delighted to see you. I always enjoy meeting with this
    group. I think a lot of you know that at least--I've identified at least
    three errant members of my administration who have been associated with
    YPO, Erskine Bowles, Mack McLarty, and Phil Lader. There may be more,
    and if there are, they'd probably like to be back with you instead of
    over here with me. [Laughter]
        I will try to be succinct about what I want to say. I know that the
    Treasury Secretary and others are coming on in a few moments to talk
    about the details of our budget agreement and some of the other issues
    that are cooking around here in Washington today. But I'd like to use
    this opportunity to make an official announcement about China. And let
    me just sort of set the stage by saying I think that our country has
    three huge questions that we are in the process of answering as we move
    into a new century and a very different time.
        One is, how are we going to preserve a structure of opportunity for
    the next generation to keep the country going and growing? The second
    is, what kind of society are we going to be? Is this country going to
    work as a whole? Can we deal with problems of crime and welfare and the
    intergenerational responsibilities as the baby boom generation retires?
    And can we learn to live in what is rapidly becoming the world's most
    rapidly multiracial, multireligious, multiethnic democracy? There are
    four school districts in America now where the children come from more
    than 100 different ethnic groups in one school district. And the third
    great question is, are we prepared to do what it takes to see the United
    States continue to be the world's leading force for peace and freedom
    and prosperity? Because ironically, at the end of the cold war, because
    we are not in two armed camps in the world, all of our economic and
    military strength can only be brought to bear if we're willing to become
    more interdependent with the rest of the world and recognize our
    linkages.
        In some ways, the decision that we have to make every year about
    China reflects elements of all three of those great questions, our
    prosperity, the kind of society we are, and how we're going to deal with
    the rest of the world. The United States has a huge stake in the
    continued emergence of China in a way that is open economically and
    stable politically. Of course, we hope it will come to respect human
    rights more and the rule of law more and that China will work with us to
    secure an international order that is lawful and decent.

    [[Page 620]]

        I have decided, as all my predecessors have since 1980, to extend
    most-favored-nation status to China for the coming year. Every
    Republican and Democratic President since 1980 has made the same
    decision. This simply means that we extend to China the same normal
    trade treatment that virtually every other country on Earth receives
    from the United States. We believe it's the best way to integrate China
    further into the family of nations and to secure our interests and our
    ideals.
        But as we have had controversies and differences with China over the
    years, this decision itself has become more controversial, because there
    are those in both parties in the Congress who believe that if we hold
    our trade relationship hostage to China because of our differences on
    human rights, our weapons technology, or the future of Hong Kong, we
    will have more influence since we buy about 30 percent of China's
    exports every year--sometimes we buy even more.
        But I believe if we were to revoke normal trade status, it would cut
    off our contact with the Chinese people and undermine our influence with
    the Chinese Government. This is a big issue this year because, as many
    of you know, under the agreement signed more than a decade ago between
    Great Britain and China, Hong Kong is reverting to China shortly.
        I think it's interesting that Hong Kong, which has the world's most
    open trading system, has vociferously argued to the United States that
    we should extend most-favored-nation status. Even those people in Hong
    Kong that have been most passionately identified with the cause of
    freedom and human rights and have been most in conflict with the Chinese
    have argued that we have to maintain an open trading relationship with
    them so that we can continue to work with them. I might also say that if
    we were to revoke their normal trading status, it would close one of the
    world's most rapidly growing, emerging markets, one that already
    supports 170,000 American jobs and doubtless will support more in the
    years ahead.
        So our broad policy is engagement. That doesn't mean that we win
    every point, but it means we work together when we can and we're honest
    in our disagreements when they exist. For example--and I think it's
    important to point this out--we actually work together with China quite
    a lot. We worked with them to extend the nonproliferation treaty
    indefinitely. That means that we've got over 170 countries in the world
    that say they will never develop any kind of capacity to proliferate
    nuclear weapons around the world in other countries, and they agreed to
    be tested for it.
        We worked with China to get a historic accord on the comprehensive
    ban of nuclear testing. We worked with them to freeze North Korea's
    nuclear weapons program, which, when I became President 4 years and 4
    months ago, I was told was the most immediate major security concern of
    the Nation at the time. We work with them now to advance the
    possibilities that there will actually be a lasting peace on the Korean
    Peninsula, which is the last frontier of the cold war.
        We also work with them on drug-trafficking, terrorism, alien
    smuggling, and environmental decay. And when we don't agree with them,
    we have found ways to say so without cutting off all of our contacts. We
    pressed them to stop assistance to unsafeguarded nuclear facilities in
    other countries. We insisted that they protect the intellectual property
    rights of American videotape and compact disc makers. That's a huge
    economic issue for America. And so far China has done what they said
    they would do in closing down its facilities that were essentially
    stealing money and jobs from America's businesses. That's still an
    ongoing problem; it will continue to be one, as it has been in every
    emerging country a long way from the United States that can copy things
    that we do here. But we have certainly fought to reduce the problem. We
    also took action to show our displeasure with provocative military
    actions in the Taiwan Straits last year, and we stood up for human
    rights at the Human Rights Commission meeting of the United Nations.
        So we have ways to deal with our differences. There are those who
    believe that our differences are so profound they would--we would get
    our way more, if you will, or our position would be more likely to
    prevail, if we cut off all trade contact. I believe that is wrong. And
    we're going to have a big debate about it in the Congress. But today, in
    front of you, I thought I would make this formal announcement that I do
    intend to extend most-favored-nation status. The way it works under the
    law is, now Congress has a chance to try to undo this, and we will have
    a big debate in the Congress. While you're here, if you have an opinion
    on it, I hope you'll express it to your Senator or Member of Congress.

    [[Page 621]]

        But how we deal with this goes back to the larger question: What is
    our role in the world? Do you believe we should continue to be the
    world's leading force for peace and freedom and prosperity? If so, how?
    What kind of society are we going to create? Are we going to be one
    nation, or are we going to become more divided by race, by generation,
    by income? And how are we going to preserve a structure of opportunity?
        Now, let me say when I came here, I felt very strongly that we would
    have to change the economic policy, the social policy of the country,
    the way the Government worked--the Federal Government worked--and we
    would have to have a much more aggressive and comprehensive approach to
    the world. On the economic policy, when I came here, we had a $290
    billion annual deficit with no end in sight. I was told it would be way
    over $300 billion by this year. It's going to be $67 billion this year,
    77 percent less than it was the day I took office.
        And we also have been very aggressive about trade. Again, there are
    people in both parties who seem to believe that America is disadvantaged
    by open trading systems because we pay higher wages than other countries
    and because many other countries, especially developing countries, have
    more closed economies than ours. Well, now we have some evidence to
    judge which theory is right.
        I've always believed that open trading was good for us because it
    kept us on our toes. It also helps to keep inflation down and
    productivity up. We've got some evidence now, because in the last 4
    years we've had 200 new trade agreements as well as the big NAFTA
    agreement and the World Trade Organization being set up and an agreement
    in principle with the Asian-Pacific countries to go to a free-trade area
    there by early in the next century and an agreement with the Latin
    American countries to go to a free-trade area of the Americas early in
    the next century.
        In the midst of the welter of all that activity, we can see what the
    consequences were. We also downsized the Government and increased our
    investment in education, technology and science, and medical research.
    Now, after 4\1/2\ years, the deficit's come down by 77 percent, we have
    the lowest unemployment rate in 24 years, the lowest inflation rate in
    30 years, the highest business investment in 35 years, the smallest
    Federal Government in 35 years, and as a percentage of the civilian work
    force, it is the same size it was in 1933 when President Roosevelt took
    office before the New Deal.
        So I think it's hard to argue that we're not moving in the right
    direction. We've also, parenthetically, had the biggest decline in
    inequality among classes of working people in over 30 years. So America
    does not have to be afraid of competition. America can balance the
    budget and increase investment where we need to increase investment, and
    we can do this in a disciplined way.
        In the area of social policy, we've passed a new crime bill, took a
    different approach to welfare, basically tried to put the family back at
    the center of social policy and reconcile a lot of the emerging
    conflicts between family and work, which is bedeviling most working
    families throughout the country, including people in rather high-income
    brackets. It is a general problem of our society. And we have had the
    biggest drop in welfare rolls in 50 years in America in the last 4
    years, before the impact of the new welfare reform law. And I'll say
    more about that in a minute.
        The crime rate has gone down 5 years in a row in America for the
    first time in 22 years. And we now know exactly what to do about it.
    It's just a question of whether we will. Not only that; on the more
    troubling problem of youth and gang violence, the city of Boston, the
    city of Houston, and a few other big cities in America have seen big
    declines in youth crime. And in Boston, Massachusetts, not a single
    child under the age of 18 has been killed with a gun in a year and half
    now.
        So there is a lot of confidence in this country now that we can
    actually make sense out of our common life, that we can actually deal
    with these problems. And that's very important. And for the rest of us,
    it's great because we don't have to think up something to do. We've got
    a roadmap out there; we can just try to replicate it, community by
    community, to make it work.
        In the area of our relationships with each other and our diversity,
    I would say that we have made some significant progress. We now--I think
    as a country we're still debating a lot of these things, like
    affirmative action, and I have my own views about that. But I would hope
    that the American people at least understand that if you look at how big
    the world is getting and the fact that our population is relatively
    smaller as a percentage of the whole

    [[Page 622]]

    than it used to be, less than 5 percent, and our economy is not as big
    as it once was as a percentage of the whole, although still over 20
    percent, the fact that we have people in the United States from
    everywhere else is an enormous asset to us in a global economy.
        But we have to learn to find a way to respect our differences and be
    bound together by our shared values. And it sounds so simple, it may
    sound almost trite, but when you consider what people do with
    differences in Bosnia, in Northern Ireland, in the Middle East, and in
    countless other places around the world, you sometimes wonder whether
    there is not some primitive urge in all of us that, unless it's
    consistently tended to, can cause enormous difficulties. And so I think
    that we cannot spend enough time on figuring out a way to make sure that
    we're a very different country but we're still one America.
        Finally, let me say I'm quite determined that we have got to fight
    through all these successive issues here about America's role in the
    world. I've tried to be very careful not to send our troops into harm's
    way and in an indiscreet way, not to pretend that we could solve all the
    problems of the world. But I know that we have an opportunity here and a
    responsibility unlike any ever imposed on a nation in history. Because
    of the way the cold war ended with a victory for freedom and for free
    markets, because other countries are willing to work with us and even
    give higher percentages of their income that we do to the work of
    development and expanding the capacity of people in other countries, we
    have a significant responsibility here to try to fulfill these
    incredible opportunities.
        And every one of you needs to spend some time thinking about this.
    Because historically, our country--historically--has been relatively
    isolationist. If you go through the whole history of America--George
    Washington told us that we should beware of foreign entanglements, and
    all of our--we've always been somewhat reluctant to get involved in the
    world.
        I think the only reason we did it after World War II is the Soviet
    Union was there. There was a cold war; the threat was clear and
    apparent. And now, sometimes I think we don't see our own best
    interests. We're going to have another big trade issue coming up after
    MFN, and that's the question about whether the President should be given
    what is called fast-track authority. And for those of you who aren't
    familiar with the trade lingo, all that means is that we can negotiate a
    trade agreement with another country and present it to Congress, and
    they have to vote it up or down instead of, in effect, being able to
    amend it 100 times so that, in effect, it would no longer be the
    agreement that we made with another country--treats it almost like a
    treaty, except it just requires a majority vote.
        I can't see why we wouldn't want to do that when we got 4.9 percent
    unemployment. And another statistic I didn't give you is for the last 2
    years more than half of the new jobs in this country have paid above
    average wages. So I think we should feel good about these things. And I
    certainly do, and I want you to.
        Now, let me just say in closing, they're going to come on and tell
    you a little about the budget agreement. But in the last 4\1/2\ months,
    in the categories I gave you, if you look, it's creating a structure of
    opportunity for America. We've agreed to the first balanced budget in
    over three decades. And it is a compromise agreement between the
    Republicans and the administration and the Democrats in Congress and the
    leadership; it is a principled one. Does it solve all of America's
    problems? No. Will it get us to a balanced budget? Yes, it will.
        And I might say, when I got here, a lot of times there were overly
    optimistic economic assumptions used in putting these budgets together,
    especially by the executive branch, in both parties. Every year I've
    been here, the deficit's been lower by several billion dollars than we
    estimated it would, every single year. So I want to assure you that we
    didn't cook up a bunch of numbers. Now, if we have a horrible recession,
    will the deficit be bigger? Yes, it will. But at least we've been quite
    responsible in the numbers that we've used here to try to make sure we
    were not misleading the American people about this.
        So we got a budget agreement, which is important. We had a new
    telecommunications agreement, which will open 90 percent of the world's
    markets to American producers of telecommunications services and create
    hundreds of thousands of good jobs in this country over the next several
    years. We have had--we got the Chemical Weapons Convention ratified,
    which is a huge problem because we've got to stop the proliferation of
    chemical weapons, and it could affect you and your life and your
    community. The guy that blew up the Federal building

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    in Oklahoma City, in that truck was fertilizer, a chemical weapon. But
    in Japan, a lot of people died in the subway because they had a
    laboratory that made sarin gas. So this is a major issue. Can we
    guarantee that there will never be anybody in a laboratory making
    chemical weapons? No. But we can dramatically reduce the chances that
    terrorists can get them in ways that make Americans safer all across the
    country.
        We have reached this historic agreement between NATO and Russia to
    expand NATO and have a partnership with Russia which will enable us to
    have a unified Europe and, hopefully, avoid what destroyed millions and
    millions of people in the last century, in the 20th century, which was
    all these fights in Europe.
        So the country is in good shape. We're moving in the right
    direction. We're dealing with all these issues. Are there things that
    still have to be done? Yes. Have we made adequate provision for the
    retirement of the baby boomers and not imposing undue burdens on our
    children? Not yet. Will we do so? I'm absolutely convinced we will. But
    you have to understand this system will only accommodate so much change
    at one time. I've thought about that a lot in the last 4 years. And the
    fact that we have a budget that will balance the budget, meet our
    national security needs, have the biggest increase in investment in
    education in a generation, continue our progress in the environment and
    medical research and technology, I think is a very significant thing
    and, parenthetically, provide health care coverage to 5 million kids
    that don't have it is very encouraging.
        The last point I want to make is this. The biggest near-term problem
    we have in the country is that 20 percent of the kids who are born in
    this country are born below the poverty line, and many of them are still
    living in completely dysfunctional environments. When the Presidents,
    all of us, the living Presidents, and General Powell sponsored that
    Summit of Service in Philadelphia, it was about more than trying to get
    everybody to do more community service. It was about trying to focus
    attention on having every community in the country develop a strategy to
    make sure every child has a healthy start, a decent education, a safe
    place to live, a mentor, and a place to serve the community and feel
    worthwhile. That is the biggest near-term problem of the country.
        You live in a nation where drug use is dropping dramatically among
    young adults and still going up among juveniles, where crime is going
    down dramatically around the country but still going up among juveniles,
    except in the instances that I cited and others like that.
        So as you look ahead to your own responsibilities, I would just
    mention two things. Number one, every community needs to develop a
    system of dealing with the children of the community. Number two, the
    welfare reform bill in the budget that we just agreed to will include
    tax incentives that are very tightly targeted to move people from
    welfare to work. And States have the power actually to give employers
    what used to be the welfare check as an employment and training subsidy.
        I would hope that the members of the YPO would consider whether or
    not there is a role for you to play in your States and your communities,
    because under the welfare reform law, we have to move almost a million
    people from welfare to work in the next 4 years. We moved a million
    people from welfare to work in the last 4 years, but over 40 percent of
    that was the growth of the economy, and we produced 12.5 million new
    jobs. Maybe we can do it again. It's never happened in the history of
    the country before that we've had 8 years that good, back to back. Maybe
    we can do it again.
        But under the law, we have to move that many people from welfare to
    work, whether the private economy produces 40 percent of those jobs or
    not, in the ordinary course of growth. There will be incentives there,
    but we had to do this--I would argue we had to do something like this to
    break the cycle of dependency that so many people were trapped in. But
    having now told people, most of whom are single mothers with very small
    children, that there is a limit to how much public assistance you can
    have, and you have to go to work at the end of a certain amount of time,
    period, we have to make sure that there are jobs there for them.
        The communities of our country are going to get about $3 billion
    that will go into the high unemployment areas to do community service
    work when there's no way the private sector could do it. But for the
    rest, it will have to be done by the private sector. So I hope that
    while you're here and after you go home, you will be willing to consider
    whether there's something you could do to help us deal with this
    problem. Because if we can break the cycle of dependency and all people
    who are out of work who are adult, able-bodied, and otherwise

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    have the capacity to work begin to be treated the same, instead of
    having some people disaggregated over here as being on welfare as if
    they couldn't work, we will have gone a long way toward changing the
    future of children in America and, therefore, changing the future of the
    country.
        Thank you very much.

    Note: The President spoke at 2:48 p.m. in Room 450 of the Old Executive
    Office Building.