[Public Papers of the Presidents of the United States: WILLIAM J. CLINTON (2000, Book I)]
[January 29, 2000]
[Pages 150-161]
[From the U.S. Government Publishing Office www.gpo.gov]
Remarks to the World Economic Forum and a Question-and-Answer Session in
Davos, Switzerland
January 29, 2000
President Clinton. Thank you very much. President Schwab, I think that it is an indication of the importance of
the topic and the importance of the World Economic Forum that you have
so many leaders from around the world here today. I see, just scanning
the audience, the President of Colombia, the
President of South Africa, Chairman
Arafat, the Prime Ministers of Spain and Turkey, and a number
of other leaders.
We have here with me today the Secretary of State, the Secretary of the Treasury, the Secretary of Commerce,
the Secretary of Energy, and our Trade
Ambassador. There's no one home in
Washington to take care of things. [Laughter] We have a large delegation
from the United States Congress here; leaders from all over the world in
business, public life; the leader of the American union movement, John
Sweeney, whom I know has spoken to you.
So I think that maybe the presence of all these distinguished people
in the crowd is evidence of the importance of our being here and
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shows, in my mind, one of the things we need to determine to do as a
people.
The World Economic Forum has been at it, as you pointed out, for 30
years now. The thing that I have appreciated most about your
deliberations is your consistent focus on the future. For example, you
spotted the networking of society before the Internet was out of its
infancy. Both Vice President Gore and my
wife, Hillary, have spoken here, and
I am glad, even though I am late, to finally get in on the act.
[Laughter]
Your theme, ``New Beginnings: Making a Difference,'' it seems to me,
is the right theme. What I want to ask all of you to think about today
is, what does making a difference and new beginnings mean in an era of
globalization? What are the opportunities? What are the obligations?
What are the hazards? What new beginnings will make a positive
difference? And, perhaps the most difficult question of all, do we have
the institutional and organized mechanisms to make them?
As we know, in many ways the global economy was almost as integrated
as it is today 100 years ago. But after World War I, leaders in the
United States and Europe made what all now recognize were false and
shortsighted choices. Instead of partnership, they chose protectionism
and isolationism. And for decades, globalization went in reverse, with
utterly disastrous consequences.
After the second war, the leaders were given a second chance. This
time it was clear that what was at stake was not simply the return of
prosperity but the defense of freedom. They chose the path of economic
and political partnership and set the stage for 50 years of growth
across the globe. No one can seriously argue that the world would be a
better place today if they had reverted to the old isolationism.
So today, at the start of a new century, the entire world, not
simply Europe and the United States and the wealthiest nations of Asia,
the entire world finds itself at a crossroads. Globalization is
revolutionizing the way we work, the way we live, and perhaps most
important, the way we relate to each other across national boundaries.
It is tearing down doors and building up networks between nations and
individuals, between economies and cultures.
The obvious consequence is that we are growing ever more
interdependent, driven to be part of every vital network, understanding
we cannot build our own future without helping others to build theirs.
Today, we know that because of scientific and technological advance, we
can change the equation between energy use and economic growth. We can
shatter the limits that time and space pose to doing business and
getting an education.
But the openness and mobility, the flexible networking and
sophisticated communications technologies that have made globalization
what it is, so totally consuming--all these factors have also made us
more vulnerable to some of our oldest problems.
Terrorism, narcotraffickers, and organized criminals, they can use
all this new technology, too, and take advantage of the openness of
societies and borders. They present all of us with new security
challenges in the new century. The spread of disease; ethnic, racial,
tribal, religious conflicts, rooted in the fear of others who are
different--they seem to find ways to spread in this globalized era. And
the grinding poverty of more than a billion people who live on less than
a dollar a day and live for a year on less than what it costs to stay in
a nice hotel at night--they, too, are part of the globalized world. A
few of us live on the cutting edge of the new economy; too many of us
live on the bare edge of survival, without the means to move up.
Those who wish to roll back the forces of globalization because they
fear its disruptive consequences, I believe, are plainly wrong. Fifty
years of experience shows that greater economic integration and
political cooperation are positive forces. Those who believe
globalizaton is only about market economics, however, are wrong, too.
All these new networks must lead to new arrangements that work for all,
that work to spur growth, lift lives, raise standards, both around the
world and within nations.
Now, leaders from business, government, and civil society,
therefore, must come together to build a future that can unite, not
divide, us. We must recognize, first, that globalization has made us all
more free and more interdependent. Those of us who are more fortunate
must be more responsible and work harder to be good neighbors and good
partners. The United States has a special responsibility in that regard,
because we have been so fortunate in our history and so very fortunate
over the last decade.
I came here today in the hope that by working together, we can
actually find a way to create the conditions and provide the tools to
give
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people on every continent the ability to solve their own problems, and
in so doing, to strengthen their own lives and our global economy in the
new century.
I would like to make just a few points. First, I think we have got
to reaffirm unambiguously that open markets and rules-based trade are
the best engine we know of to lift living standards, reduce
environmental destruction, and build shared prosperity. This is true
whether you're in Detroit, Davos, Dacca, or Dakar. Worldwide, open
markets do create jobs. They do raise incomes. They do spark innovation
and spread new technology. They do--coupled with the explosion of
international communications through the Internet, which is the fastest-
growing network in history. For example, when I became President 7 years
ago, there were only 50 pages on the World Wide Web. Today, there are
over 50 million--in 7 years. Trade broadens the frontiers of possibility
for all of those who have access to its benefits and the tools to claim
them.
As I said a couple of days ago in my State of the Union Address, for
me there is only one direction forward on trade, and that is to go on
with what we're doing, recognizing that this is a new and very different
world, that the idea that we would be better off with less trade, with
less rule-based trade by turning away from our attempts to find
international ways within which we can work together, I think is dead
wrong.
Now, having said that, what does that mean? Well, for me, it meant
that when, first our neighbors in Mexico and then our friends in Asia
were in turmoil and crisis, the United States had to keep our markets
open, even though it led to record trade deficits. For me, it means it's
very important to get China into the World Trade Organization, to ensure
that China's markets are open to us--even as we have our markets open to
China--and to advance peace and stability in Asia and increase the
possibility of positive change in China.
The changes in our markets are only beginning. You know, people have
been trading goods across borders as long as there have been borders.
But communications technology and the Internet are expanding trade in
unprecedented ways many of you understand better than I. Today,
everything from data processing to security monitoring to stockbrokering
and advanced degrees can be bought and sold all over the world. E-
commerce creates enormous potential for growth anywhere, and it will
continue to do so if we can resist the temptation to put up barriers to
this important part of our new economy.
Trade is especially important, of course, for developing nations.
Listen to this--this is something that I think people from the
developing nations who oppose the WTO should think about--from the
1970's to the early nineties, developing countries that chose growth
through trade grew at least twice as fast as those who chose not to open
to the world. The most open countries had growth that was 6 times as
fast.
Think about what Japan or the nations of southeastern Europe were
like 50 years ago. They were poor, largely rural societies. Today, they
are prosperous global leaders, in no small measure because of trade.
Look at South Korea, Mexico, or Thailand, which built their growth on
openness. Even after the recent traumas of financial crises, their
national incomes are still more than double the 1970 levels, when they
were more closed. And their gains in literacy, education, and life
expectancy are truly extraordinary, far outpacing countries that chose
not to open to the world.
Certainly, many of the people who have questioned the wisdom of open
trade are genuinely concerned about the fate of the poor and the
disadvantaged, and well they should be. But they should ask themselves,
what will happen to a Bangladeshi textile worker or a migrant from the
Mexican countryside without the prospect of jobs and industry that can
sell to foreign as well as domestic consumers? What happens to farmers
in Uruguay or Zimbabwe, in Australia, Europe, the United States, if
protectionism makes it impossible to market products beyond their
borders? How can working conditions be improved and poverty be reduced
in developing countries if they are denied these and other opportunities
to grow, the things that come with participation in the world economy?
No, trade must not be a race to the bottom, whether we're talking
about child labor, basic working conditions, or environmental
protection. But turning away from trade would keep part of our global
community forever on the bottom. That is not the right response.
Now, that means, it seems to me, that we must face another
challenge. The second point I want to make is that developing countries
will only reap the benefits of integration in the world
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economy if the industrialized countries are able to garner enough
domestic support for policies that are often controversial at home. It
is easier for us to gather here, in vigorous agreement--and I'm glad you
brought Mr. Sweeney over so we could have an
occasional voice of occasional disagreement.
But most of us here agree with everything I just said. Why? Well, we
have seen and personally felt the benefits of globalization. But
convincing our publics to go along, to go for greater integration in a
rule-based system which might require them to change further and might
require some of them, unlike most of us, to change what they do for a
living, remains a challenge.
How shall we meet it? In the United States, we must overcome
resistance to our groundbreaking trade agreements with Africa and the
Caribbean Basin--even though if they both pass, their impact on our
economy will be very small, while their impact on the African nations
that participate and those in the Caribbean will be very large indeed. I
am determined to pass both measures this year, and I think we'll
succeed, but it's an indication of what kinds of problems every country
faces.
Indeed, you probably have noted this, but one of the most ironic
and, to me, disappointing consequences of our unprecedented prosperity,
which has given us over 20 million new jobs in my country in the last 7
years, is that it seems to me that protectionist sentiment, or antitrade
sentiment at least, is greater now than it was 7 years ago when I took
office, in the United States Congress. I want to talk a little about
that today and how it relates to what's going on in other countries. But
we all have an obligation to work through that, nation by nation.
Part of what countries have to do is to be able to point to what
other countries are doing and to say, ``Well, look what they're doing;
we ought to do this. We ought to do our part.'' That means we are
significantly affected in the United States by the policies of Europe,
Japan, and other wealthier countries. I think for its part, Europe
should put its agricultural subsidies on the table. If even one-third of
the world's subsidies and tariffs in agriculture were eliminated, the
poorest developing countries that could export would gain more than $4
billion in economic benefits every single year.
We can also, I must say, do better in the developed countries if we
are able to make a more forceful case for the value of imports. None of
us do this enough, and I must say, I haven't done this enough. We all go
around talking about--every time we talk about trade agreements in our
countries, we always talk about how many jobs will be created at home
because we're opening markets abroad, and we make ourselves vulnerable
to people who say, ``But it may not reduce the trade deficit, and look
how big it is.''
So I just want to say, I wish everyone here would look at yourselves
and ask yourselves if you are wearing anything made in a country other
than the country where you live.
There are benefits to imports. We don't just do a favor to
developing countries or to our trading partners in developed countries
when we import products and services from them. We benefit from those
products. Imports stretch family budgets. They promote the well-being of
working families by making their dollars go further. They bring new
technology and ideas. They, by opening markets, dampen inflation and
spur innovation.
In a few days, we will have the longest economic expansion in the
history of the United States. I am convinced one of the reasons that it
will happen is that we have kept our markets open, even in tough times,
so that there has always been pressure to keep inflation down as we
continue to generate jobs and growth. I am convinced of it. And those of
us in wealthier countries need to make the case that even when we have
trade deficits, if we're growing jobs and we're gaining ground and the
jobs are growing in areas that pay better wages, we are getting the
benefits of imports. I think all people in public life have been
insufficiently willing to say that. And we must do more.
The third point I would like to make is that we simply cannot expect
trade alone to carry the burden of lifting nations out of poverty. It
will not happen. Trade is essential to growth in developing countries,
but it is not sufficient for growth in developing countries. Sustained
growth requires investment in human capital, education, health care,
technology, infrastructure. Particularly in an economy that runs more
and more on brainpower, no investment pays off faster than education.
The international community has set 2015 as a target for giving every
child access to basic education. I'm asking our
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Congress for more funding to help nations get more children out of work
and into school. I hope others in the public and private sectors will
join us.
Each year in the developing world, we see millions of lives lost and
billions of dollars lost--dollars that could be spent in many more
productive ways--to killer diseases like AIDS, malaria, and
tuberculosis. Last year in Africa, AIDS killed more people--10 times
more--than all the wars did. We have the technology to find vaccines for
those diseases. We have medications that can lengthen and improve the
quality of life.
But let's face a fact. The pharmaceutical industry has no incentive
to develop products for customers who are too poor to buy them. I have
proposed a tax credit to say to our private industry, if you will
develop these vaccines, we'll help to pay for them. I hope the World
Bank, other nations, and the corporate world will help us in meeting
this challenge. If we could get the vaccines out to the people who need
them in time, we could save millions and millions of lives and free up
billions of dollars to be invested in building those lives, those
societies into strong, productive partners, not just for trade but for
peace.
We can also help countries help themselves by lifting their
crippling burden of debt, so they'll have more to invest in their people
and their future. The Cologne debt initiative commits us to reducing the
foreign debt of the world's poorest and most indebted nations by as much
as 70 percent. Last fall I pledged that the United States would forgive
100 percent of the debts those countries owe to us. This year I will
work to fund our share of the multilateral debt relief. I am pleased
that so many others have made similar pledges and look forward to the
first countries benefiting from this initiative very soon. If we keep
working on this, expanding it, and we all pay our fair share, we can
turn a vicious cycle of debt and poverty into a virtuous cycle of
development and trade.
The last point I'd like to make on this is that I think the
developed countries who want an open trading system that has the trust
and confidence of developing countries should also contribute to
indigenous trade, which may not be directly related--excuse me,
indigenous economic development, which may not be directly related to
trade. Just for example, the United States Agency for International
Development each year funds about 2 million microenterprise loans in
poor communities in Africa, Asia, and Latin America.
I will never forget going to small villages in Senegal and Uganda
and seeing people who had gotten their first business loan--sometimes as
small as $50--show me their businesses, show me the people they were
doing business with in their villages, who had also gotten such loans.
I'll never forget the man in Senegal who was this designated village
accountant, making me wait outside his front door while he went into his
house to bring me back all of the accounts he had carefully kept for the
last month, to prove that the money we were investing was being spent
wisely.
Does this have any direct impact on international trade? Of course
not. Did it make that society stronger? Did it make the economy
stronger? Did it increase the stability and long-term prospects of the
nation? Of course it did. So I believe we should all be thinking about
what more we can do on the indigenous economic development issues.
The President of Colombia is here. I've
asked the Congress to pass a very ambitious program to try to help
Colombia deal with the narcotraffickers and the guerrillas and all the
problems that he faces--perhaps the oldest democracy in Latin America.
But one part of it is for economic development. It is one thing to tell
people they should stop growing crops that can be turned into drugs that
can kill our children, and quite another to tell people, if you do this,
by the way, here's a way to support your children.
And so I think that we can never lose sight of the fact that if we
want to build an integrated economy with more and more trade, we have to
build an economy from the grassroots up in places that want to have a
balanced, stable society.
The fourth point I would make is that developed and developing
countries alike must ensure that the benefits of trade flow widely to
workers and families within our nations. Industrialized nations must see
that the poor and those hard hit by changes are not left behind. And all
nations need to ensure that workers have access to lifelong learning
benefits, they can move between jobs without being unemployed for too
long and without having their standard of living dropped.
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We have to work with corporate leaders to spur investment also in
the people and places that have been left behind. We have to find the
new markets within our own Nation. For example, I will tell you
something that might surprise many of you. The national unemployment
rate in the United States is 4.1 percent. On many of our Native American
Indian reservations, the unemployment rate is about 70 percent. In
isolated rural areas in America, the unemployment rate is sometimes 2,
3, 4 times as high as the national average. So we have not figured out
how to solve this. When you have these eyesores in a country, when the
development is not even, they can easily become the symbols with which
those who do not want us to open our markets more and build a more
integrated world can use to defeat our larger designs, even if they're
right.
And as I said to the American people in Congress a couple of nights
ago, we in the United States, I think, have a terrifically heavy
responsibility to reach out to our poor communities, because we've never
had an expansion this long, and if we can't help our people now, we will
never get around to it. I am convinced that even though this has nothing
directly to do with trade, if we succeed, we will build more support for
a more integrated global economy.
Leaders of developing nations have their responsibilities as well,
to narrow the gap between rich and poor by ensuring that government
institutions are open and accountable, honest and effective, so they can
get foreign investment, have widely-shared growth, uproot corruption,
and solve social problems. There is a limit to what wealthy nations can
do for people who will not take the necessary steps to make their own
societies work. Even in this heyday of global free enterprise, many
people suffer not because their governments are too strong but because
their governments are too weak.
Fifth, since globalization is about more than economics, our
interdependence requires us to find ways to meet the challenges of
advancing our values without promoting protectionism or undermining open
trade. I know that the words ``labor and environment'' are heard with
suspicion in the developing world when they are uttered by people from
the developed world. I understand that these words are code for ``rich-
country protectionism.''
So let me be as clear as possible on this. We shouldn't do anything
to stunt the economic growth and development of any developing nation. I
have never asked any developing nation, and never will, to give up a
more prosperous future. But in today's world, developing countries can
achieve growth without making some of the mistakes most developed
countries made on worker protection and the environment as we were on
our path to industrialization. Why is that? Why can they get richer
without doing the same things we did? And since, when countries get
richer, they lift labor standards and clean up the environment, why do
we care? I think there are two answers to that.
First, the reason they can do it is that the new economy has
produced scientific and technological advances that absolutely disprove
the old ideas about growth. It is actually now possible to grow an
economy faster, for example, with a sensible environmental policy and by
keeping your kids in school instead of at work, so that you build more
brainpower to have more rapid, more long-term, more balanced growth.
Secondly, we all have an interest particularly in the environmental
issue, because of global warming, because of greenhouse gas emissions,
and because it takes somewhere between 50 and 100 years for those
emissions to go away out of our larger atmosphere. So if there is a way
for us to find a path of development that improves, rather than
aggravates, the difficulties we have with climate change today by
reducing rather than increasing greenhouse gases, we are all obligated
to do it.
That is why, after the Kyoto Protocols, I recommended to all the
advanced nations that we engage in emissions trading and vigorous
investment of new technologies in developing countries, with an absolute
commitment to them that we would not ask them to slow their economic
growth.
We will see within the next few years automobiles on the streets all
over the world that routinely get somewhere between 70 and 90 miles a
gallon. In South America, many countries run on ethanol instead of
gasoline. The big problem is that the conversion is not very good; it
takes about 7 gallons of gasoline to make 8 gallons of ethanol. Within a
matter of a couple of years, scientists almost certainly will unlock the
chemical block that will enable us to produce 8 gallons of fuel from
farm products or grasses or even farm waste like rice hulls, for 1
gallon of gasoline. When that happens, you will see people driving cars
that effectively
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are getting 400 or 500 miles to the gallon of gasoline.
These things are before us. All these technologies should be
disseminated as widely as possible, as quickly as possible, so that no
nation gives up any growth to be a responsible environmental partner in
the world.
And on the human development side, I will say again, the globalized
economy prizes human development above all else. It is in the long-term
and the short-term interests of developing countries not to abuse their
workers and to keep their children in school.
Now, do we have all the answers to this? No, partly because the
circumstances and the possibility, even for trade engagement, from
nation to nation vary so much; but partly because we don't have more
forums like this within which we can seek common understandings on
worker rights, the environment, and other contentious issues.
We have suggested that the Committee on Trade and the Environment be
invited to examine the environmental applications of WTO negotiations in
sessions where developing countries form the majority. We cannot improve
cooperation and mutual understanding unless we talk about it. That is
our motivation--that is our only motivation in seeking to open a
discussion about the connections between labor and trade and
development, in the form of a new WTO working group.
And I will say this again, the consequence of running away from an
open dialog on a profoundly important issue will be--it won't be more
trade; it'll be more protection. The consequence of opening up a dialog
and dealing honestly with these issues will show that in the new
economy, we can have more growth and more trade with better treatment
for people in the workplace and more sensible environmental policies. I
believe that. You have to decide if you believe that.
My experience in life--and I'm not as young as I used to be--let me
just say, at Thanksgiving a 6-year-old daughter of a friend of mine
asked me how old I was. She looked up at me and she said, ``How old are
you, anyway?'' And I said, ``I'm 53.'' She said, ``That's a lot.''
[Laughter]
Well, it looks younger every day to me. But I have lived long enough
to know this: In the words of that slogan that people my daughter's age
always use, denial is not just a river in Egypt. [Laughter] And the more
we hunker down and refuse to devote time systematically to discussing
these issues and letting people express their honest opinion, the more
we are going to fuel the fires of protectionism, not put them out. We
have to make some institutional accommodation to the fact that this is a
part of the debate surrounding globalization.
Now, I feel the same way about labor standards. And there is a win-
win situation here. Let me just give you one example. We had a pilot
program through our Agency for International Development, working with
the garment industry in Bangladesh to take children out of factories and
put them back in schools. The program got kids to learn and actually
boosted garment exports and gave jobs to adults who would otherwise not
have had them.
We can do more of this if we lower the rhetoric and focus more on
results. Common ground means asking workers in developed countries to
think about the future of workers in Asia, Africa, or Latin America. It
means governments finding the courage to rise above short-term political
interest. It means corporations taking responsibility for the effects of
their actions, whether they're in an African delta or a New York
highrise. It means a new, more active idea of corporate responsibility,
stepping up to the plate to pay for vaccines or educate a new generation
of workers in another country as a part of the globalization economic
strategy.
Finally, let me say that the lessons from our history are clear: We
will--we must--support the rules-based system we have, the WTO, even as
we seek to reform and strengthen it.
I think those who heard a wakeup call on the streets of Seattle got
the right message. But those who say that we should freeze or disband
the WTO are dead wrong. Since World War II, there have been eight
separate rounds of multilateral trade negotiations, hundreds of trade
agreements signed. What's happened? Global trade has increased
fifteenfold, contributing to the most rapid, sustained, and, yes, widely
shared growth ever recorded.
There is no substitute for the confidence and credibility the WTO
lends to the process of expanding trade based on rules. There's no
substitute for the temporary relief WTO offers national economies,
especially against unfair trade and abrupt surges in imports. And there
is no
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substitute for WTO's authority in resolving disputes, which commands the
respect of all member nations. If we expect public support for the WTO,
though--I'll get back to my main point--we've got to get out of denial
of what's happening now.
If we expect the public to support the WTO the way I do--and I think
almost all of you do--we have to let the public see what we're doing. We
have to make more documents available, faster. We have to open dispute
panel hearings to the public. We have to allow organizations and
individuals to panel their views in a formal way. And we all have to
play by the rules and abide by the WTO decisions, whether we win or
whether we lose.
Let me be clear. I do not agree with those who say we should halt
the work of the WTO or postpone a new trade round. But I do not agree
with those who view with contempt the new forces seeking to be heard in
the global dialog. Globalization is empowering people with information,
everywhere.
One of the most interesting things I did on my trip to China was
visit an Internet cafe. The more people know, the more opinions they're
going to have; the more democracy spreads--and keep in mind, more than
half the world now lives under governments of their own choosing--the
more people are going to believe that they should be the masters of
their own fate. They will not be denied access. Trade can no longer be
the private province of politicians, CEO's, and trade experts. It is too
much a part of the fabric of global interdependence.
I think we have to keep working to strengthen the WTO, to make sure
that the international trade rules are as modern as the market itself,
to enable commerce to flourish in all sectors of the economy from
agriculture to the Internet. I will keep working for a consensus for a
new round, to promote development, to expand opportunity, and to boost
living standards all around the world. We will show flexibility, and I
ask our trading partners to do the same.
But I would like to just close by trying to put this dilemma that
you've all been discussing, and that was writ large in the streets of
Seattle, in some context. Now, keep in mind, arguably a lot of the
demonstrators in Seattle have conflicting objectives themselves, because
of the interests that they represented. The thing they had in common
was, they felt that they had no voice in a world that is changing very
rapidly. So I want to make two observations in closing.
Number one, we should stop denying that there is in many places an
increase in inequality, and we should instead start explaining why it
has happened and what we can do about it. Every time a national economy
has seen a major change in paradigm, in the beginning of the new economy
those that are well-positioned reap great gains; those that are uprooted
but not well-positioned tend to suffer an increase in inequality.
In the United States, when our economy, the center of our economy
moved from farm to factory 100 years ago--and many people left the farm
and came to live in our cities; and many people from your countries came
to our shores and were living in unbelievably cramped conditions in
tenement houses in New York City and elsewhere, working long hours,
breathing dirty air--there was a big increase in inequality, even though
there was an increase in wealth, in the beginning. Why? Because some
people were well-positioned to take advantage of the new economy, and
some people weren't.
But then political and social organizations began to develop the
institutions which would intermediate these inequalities. And the
economy itself began to mature and disperse the benefits more broadly,
and inequality went down. When we saw, beginning about 20 years ago in
most advanced economies, a shift from the industrial economy to the
digital economy, in many places there was an increase in inequality. In
our country, we had a 25-year increase in inequality, which seems to
have halted and been reversed only in the last 2 to 3 years.
So a part of this is the change in the paradigm of the global
economy which puts a huge, huge, huge premium on education, skills, and
access to information technology, which is even more burdensome to
developing economies seeking to come to grips with these challenges.
Now, having said that, it should be obvious to all that the last
thing in the world we want to do is to make the global economy less
integrated, because that will only slow the transition to the digital
economy in the poorest countries or in the poorest neighborhoods of the
wealthy countries.
The answer is to look at what happened in the transition from the
agricultural economy to the industrial economy, develop a 21st century
version of that, and get it done much, much
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faster--not to run to the past but not to deny the present.
The second point I'd like to make is this. We have a well-developed
WTO for dealing with the trade issues. We don't have very well-developed
institutions for dealing with the social issues, the environmental
issues, the labor issues, and no forum within which they can all be
integrated. That's why people are in the streets; they don't have any
place to come in and say, ``Okay, here's what I think, and here's the
contribution I have. Here's the beef I have. How are we going to work
all this out?''
That's why you're all here talking about it. That's why you've got a
record crowd here. And we all know this intuitively. So I think if I
could offer any advice, there are--there's thousands of times more
experience and knowledge about all these things in this room than I have
in my head. But I do understand a little bit about human nature and a
little bit about the emerging process of freedom and democracy. We have
got to find ways for these matters to be dealt with that the people who
care about them believe are legitimate. And we cannot pretend that
globalization is just about economics and it's over here, and all these
other things are very nice and we will be very happy to see somebody
over here somewhere talk about them. You don't live your life that way.
You don't wake up in the morning and sort of put all these barriers in
your head and--you know, it's all integrated.
It's like I say, we've got the Chairman of the Palestinian
Authority here. We're working very hard to
find a comprehensive peace in the Middle East. We can't find that peace
if we say, ``Well, here's what we're going to do on these difficult
issues and, oh, by the way, there's economics, but it's over here and it
doesn't have anything to do with it.'' We have to put all these things
together.
So I ask you, help us to find a way, first, to explain to the
skeptics and the opponents of what we believe in why there is some
increase in inequality as a result of an economic change that is
basically wonderful and has the potential, if we make the changes we
should, to open possibilities for poor people all over the world that
would have been undreamed of even 10 years ago. And second, find a way
to let the dissenters have their say and turn them into constructive
partners. If you do that, we will continue to integrate the world
economically and in terms of political cooperation.
We have got a chance to build a 21st century world that walks away
not only from the modern horrors of terrorists and bio- and chemical
terrorism and technology but away from ancient racial, religious, and
tribal hatred. Growth is at the center of that chance. It gives people
hope every day. But the economics must be blended with the other
legitimate human concerns. We can do it--not by going back to the past
but by going together into the future.
Thank you very much.
World Economic Forum President Klaus Schwab. Mr. President, ladies and gentlemen, we have just time
for one or two questions. But before raising these issues, Mr.
President, I can tell you and the applause has shown you what support
you have for your plea for an open, rules-based trading system and for
globalization. But at the same time, what we take home and what suddenly
will influence our discussions very much over the next days, I think we
have--and we are all aware here in this hall--that we have to change our
attitudes and that we have to create this human and social dimension to
globalization. It's in our own interest. And your speech, I think, will
be reminded and will be translated into the necessary action.
Now, Mr. President, just two questions. The first one: In your
reference to free trade and the WTO, you didn't mention China. And my
question is----
President Clinton. Yes, I did.
President Schwab. You mentioned it?
President Clinton. I did, but I don't have--I speak with an accent,
so--[laughter]
President Schwab. No, no. [Laughter]
President Clinton. I did, but I----
President Schwab. The question which I
would like to raise is, will you actually rally the support in your
country and internationally to get China integrated into the WTO?
President Clinton. I think so. In the United States, in the
Congress, there are basically two blocks of people who oppose China's
accession to the WTO. There are those who believe we should not do it
because even though--everyone has to recognize, if you look at our trade
deficit with China, everyone recognizes it's huge, by far the biggest
part of our trade deficit. Everyone recognizes that we have kept our
markets open to China and that if we had greater access to Chinese
markets, it would be a good thing for us. So no one could seriously
argue that--
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the openings from agriculture and for other opportunities are massive,
and that it would mean more to the United States than any other country
since we buy--we're about 22 percent of the world's economy, and every
year we buy between 33 and 40 percent of all China's exports, and we
have a major, major trade deficit.
So on the economic argument, the people who are against it say,
``Yes, that may be true, but if you put China in the WTO, it's basically
a protectionist country, and then America will never get any real action
on labor and environmental standards and all that because China will
thwart every reform we want.'' That's what people say.
Then, there is another group of people that don't want to vote for
it because of the actions the Chinese have taken to try to preserve
stability at the expense of freedom. They believe that even if China's
economy has grown more open, political crackdowns, crackdowns against
the Falun Gong and others have gotten more intense, more open, and that
it puts the lie to the argument that integrating China into the
international system will lead to a more open, more democratic, more
cooperative China. Those are basically the two arguments that will be
made.
Those both raise serious issues, but I think it would be a mistake
of monumental proportion for the United States not to support China's
entry into the WTO. I believe that because, again, my experience is that
you're almost 100 percent of the time better off having an old adversary
that might be a friend working with you, even when you have more
disagreements and you have to stay up a little later at night to reach
agreement, than being out there wondering, on the outside wondering what
you're doing and being absolutely sure whatever it is, it's not good for
them.
So I believe that having them in the WTO will not only pad the
economic benefits for the United States and other countries I mentioned
but will increase the likelihood of positive change in China and,
therefore, stability throughout Asia.
Let me say, you know, China and Russia both are still going through
big transitions. The Russian economy is coming back a little better than
most people think it is. No one knows what China and Russia will be like
10 years from now for sure, and you can't control it, unless you're
Chinese or Russian; but you can control what you do. And I don't know
about you, but 10 years from now, whatever happens, I want to know that
I did everything I could to increase the chance that they would make
good choices, to become good, constructive neighbors and good,
constructive partners in the global community.
You know, we don't agree with the Russian policy in Chechnya, but
we've gotten rid of 5,000 nuclear weapons, and we got our soldiers
working together in the Balkans. So I think the argument--we've got to
try to have these big countries integrated, for the same reason we have
to keep trying to work with India and with Pakistan to resolve those
difficulties and get them fully integrated.
At every turn, we have to ask ourselves--we cannot control what
other people do; we can only control what we do. But when all is said
and done, if it works out well or it works out poorly, we want to know
that we have done everything we possibly could to give people a chance
to make good decisions. And that's what drives me, and that's why we're
going to do everything we possibly can--under the leadership of
Secretary Daley, who's going to coordinate
our efforts to implement the agreement that our Trade Ambassador,
Charlene Barshefsky, negotiated--we're
going to try everything we can to get China permanent trading status so
we can support their entering the WTO. And my guess is that we'll do it.
But it's going to be a big fight, and you can watch it with interest
and, I hope, with support. Thank you.
President Schwab. Mr. President, you
mentioned debt relief in your speech, and you also mentioned it in your
State of the Union message. Do you think the G-7 are really doing enough
in this respect?
President Clinton. No, I don't. But if we do--I'm trying to focus on
doing what we promised to do. And again, let me tell you what the debate
is. We had an intense effort, in the last session of Congress, to pass
what the Congress was finally, at the end of the session, good enough to
do, and do on a bipartisan basis--I want to give credit to the
Republicans, as well as the Democrats, who voted for this--to support
our forgiving 100 percent of our bilateral debt for the poorest
countries. And we're going to have another intense debate to support our
contributions to the multilateral debt reduction effort, which is even
more important.
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The debate at home--basically, the people who are against this are
old-fashioned conservatives who think when people borrow money they
ought to pay it back, and if you forgive their debt, well, then, no one
else will ever loan them money, because they'll think they'll have to
forgive their debt, too. There's something to that, by the way. There's
something to that. In other words, when we get into negotiations of
whether debt should be rescheduled or totally forgiven, there are many
times--when I have confidence in the leader of a country and I know
they're going in the right direction, I would almost always rather
forgive it, assuming I could get the support in Congress to do so.
But we do have to be sensitive to the way the world investor
community views all these things, so that when all is said and done,
countries that genuinely will have to continue to borrow money can get
the money they need. But with that caveat, I favor doing more and more
than the Cologne debt initiative. But my experience is, we do these
things on a step-by-step basis. We already have broadened the Cologne
debt initiative, and we're going to broaden it again. And I think if we
get the Cologne debt initiative done and it works and people see that it
works, then we can do more.
But it is really--it is quite pointless, it seems to me, to keep
these poor countries trapped in debt. They're having to make debt
service payments, which means that they can't educate their children,
they can't deal with their health care problems, they can't grow their
economy, and therefore they can't make any money to pay their debts off
anyway. I mean, it's a totally self-defeating policy we've got now.
So I would like to see us do as much as possible, but at the same
time, I want to remind you of another point I made. A lot of countries
suffer not because they have governments that are too strong; they
suffer because they have governments that are too weak. So we have to
keep trying to build the governance capacity for countries so, when they
get their debt relief, then they can go forward and succeed. So I don't
think you should forget about that, either.
All of us have a real obligation to try to help build capacity so
our friends, when they get the relief, can make the most of it.
President Schwab. Mr. President, to
conclude our session, you have in front of you the 1,000 most
influential business leaders. What would be your single most important
wish towards them at this moment?
President Clinton. My most important wish is that the global
business community could adopt a shared vision for the next 10 to 20
years about what you want the world to look like, and then go about
trying to create it in ways that actually enhance your business, but do
so in a way that helps other people as well.
I think the factor about globalization that tends to be
underappreciated is, it will only work if we understand it genuinely
means interdependence. It means interdependence, which means we can--
none of us who are fortunate can any longer help ourselves unless we are
prepared to help our neighbors. And we need a more unifying, more
inclusive vision. Once you know where you're going, it's a lot easier to
decide what steps to take to get there. If you don't know where you're
going, you can work like crazy, and you would be walking in the wrong
direction. That's why I think this forum is so important.
You need to decide. The business community needs to decide. You may
not agree with anything I said up here today. But you have to decide
whether you really agree that the WTO is not just the province for you
and me and the trade experts. You have to decide whether you really
agree that globalization is about more than markets alone. You have to
decide whether you really agree that free markets--even in an age of
free markets, you need confident, strong, efficient government. You have
to decide whether you really agree that it would be a good thing to get
the debt off these countries' shoulders if you knew and could require
that the money saved would go into educating children and not building
weapons of destruction. Because if you decide those things, you can
influence not only the decisions of your own government but how all
these international bodies, including the WTO, work.
So the reason I came all the way over here on precious little sleep,
which probably undermined my ability to communicate today, is that
collectively, you can change the world. And what you are doing here is a
mirror image of what people are doing all over the world. This is a new
network.
But don't leave the little guys out. You know, I come from a little
town in Arkansas. I was born in a town of 6,000 people, in a State
that's
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had an income just about half the national average. I've got a cousin
who lives in Arkansas. He's a small-business man--he works for a small
business--who two or three times a week plays chess on the Internet with
a guy in Australia. Now, they've got to work out the times; how they do
that, I don't know. But the point I want to make to you is, he thinks he
knows as much about his life and his interests and how he relates to the
Internet and the world as I do. He thinks he knows just as much about
his interests as his President does, who happens to be his cousin.
So we need these networks. And you are in an unbelievably unique
position. So my one wish for you--you might think I'd say China or this
or that and the other--it's nothing specific: Develop a shared vision.
When good people with great energy have shared vision, all the rest
works out.
Thank you very much.
Note: The President spoke at 12:36 p.m. in the Plenary Room at the
Congress Center. In his remarks, he referred to President Andres
Pastrana of Colombia; President Thabo Mbeki of South Africa; Chairman
Yasser Arafat of the Palestinian Authority; President Jose Maria Aznar
of Spain; Prime Minister Bulent Ecevit of Turkey; and John J. Sweeney,
president, AFL-CIO.