[Weekly Compilation of Presidential Documents Volume 29, Number 27 (Monday, July 12, 1993)]
[Pages 1229-1236]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Interview With Foreign Journalists

 July 2, 1993

Economic Summit

    Q. What do you expect to be accomplished out of Tokyo summit? And 
what special roles do you see Japan can play in areas beyond economic 
constitution in--[inaudible]--of global partners with the United States?
    The President. First, let me say I think the G-7 meeting will be a 
very important opportunity for the leaders of the major industrialized 
countries of the world to reaffirm their commitment to global growth, to 
democracy, and to security concerns. I believe there will be serious 
discussions about three issues on the economic front, one really perhaps 
for the first time.
    The first is that I think there will be a real discussion about how 
we can coordinate our economic policies in ways that will produce 
growth. From the first week I was in office, we have spent a lot of time 
working through the finance ministers, the foreign ministers, and others 
to talk about how we can coordinate our strategies. For many years, 
other nations have asked the United States, for example, to lower the 
budget deficit. And we're working very hard on that, first through this 
$500 billion deficit reduction program that has now been passed by both 
Houses of our Congress, then through taking on a health care problem 
which is the biggest source of our growing deficit. And we need to make 
sure we are coordinating those policies with things which will produce 
an overall higher level of growth than we now have. It's a big problem 
for the United States, because two-thirds of the new jobs we've created 
here in the last 5 years have come from increased trade with other 
nations. So if Europe is down economically, if Japan is down 
economically, it's hard for us to do well here. So I think there will be 
that.
    The second issue I think that we will discuss and, I hope, make some 
genuine progress on, creating a more open trading system and increasing 
the chances that we can successfully conclude GATT by the end of the 
year.
    The third thing that I hope to see a very serious discussion on is 
the microeconomic policies of each of our nations and how we can all do 
a better job of creating jobs within our economy. Even Japan, with its 
very low unemployment rate by western standards, is having some trouble 
now creating new jobs. But it's a very big problem for the United States 
and for every other country represented around this room today.
    And I think that increasingly in a global economy, national policy 
will have to focus on what the economists call microeconomic policies: 
What kind of labor support systems do you have; what kind of education 
and training systems do you have; how do you target investment to create 
jobs? The west, and increasingly Japan, are having difficulty creating 
new jobs, even in times of economic growth.
    It's quite interesting. If you trace the last 6 or 7 years you can 
see that in all the western nations, even when there is growth, there is 
some trouble creating new jobs. So I think that this will all be--we'll 
deal with this, and I hope in a very informal and forthright atmosphere.
    It will be an interesting summit, because there will be several of 
the people there attending their very first one, first G-7, all at the 
same time.
    The second point you made about Japan's role in the world, I'm going 
to do what I can while in Japan to strengthen the bilateral relationship 
between the United States and Japan. In many, many ways it is our most 
significant bilateral relationship and the key to what happens between 
the United States and Asia. It's interesting, even though we have 
incredibly important ties to Europe, economic ties, we have a huge--40 
percent of our trade is now with the Pacific. It ac- 

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counts for almost 2\1/2\ million jobs in America, trade with the 
Pacific. So it's a big issue. And we have major security concerns, as 
you know, with regard to Japan and with Korea.
    So I'm very hopeful that even though Japan is going through a period 
of political transition, which I hope the Japanese people will view with 
excitement and interest, not with too much concern, this is a normal 
thing for a democracy. And periodically you go through these periods of 
significant change, and I view it as a positive thing for a great 
country. I think it will leave you stronger and in a better position in 
the world. So I hope we will discuss a lot of our bilateral economic as 
well as strategic concerns there. And I hope that when I leave Japan, 
our relationship will be even stronger than it is when I enter.

NAFTA

    Q. Mr. President, there was a court decision this week that's a 
roadblock to ratification of the NAFTA agreement. Your administration 
has said that you will go ahead, but you don't appear to have a lot of 
wiggle room in Congress on some of your other economic initiatives. And 
I'm wondering, first of all, how you're going to ensure the passage of 
NAFTA. And secondly, on the eve of the summit, this raises the whole 
issue of the conflict between environmental concerns and economic 
growth, and whether it's drift nets in the Pacific or toxic waste in 
Mexico or the whole problem of aid to the former Soviet Union, that 
conflict between the environment and economic growth underlies a lot of 
these issues. And I'm wondering how you see reconciling those issues at 
the G-7.
    The President. Let me mention the NAFTA first and then I'll answer 
the larger question.
    First, on the narrow issue of the lawsuit, we announced within an 
hour after the court's decision that we would appeal. And we believe we 
can win an appeal, and we can win it within the appropriate time. There 
may also be some other avenues which will permit us to do some kind of 
environmental impact statement and still meet the time limit.
    There is a strong opposition to the agreement in some quarters in 
the United States, and the relative economic problems that we all face 
now make that more difficult. That is, when unemployment is up and 
growth is down, people are more insecure. It makes some in Europe less 
enthusiastic about the GATT now. It's the same reason--it's just--a part 
of it is almost endemic to the human condition.
    I do think we have the votes to pass NAFTA in the United States 
Senate. And I think that--and we do not have today the votes to pass it 
in the United States House. But I think we can get the votes to pass it 
essentially by doing three things:
    First of all, by successfully concluding the agreements now subject 
to negotiation between Canada and Mexico and the United States to 
strengthen our common efforts at lifting labor standards and 
environmental quality, particularly along the Rio Grande River, which 
has been a huge problem.
    And I should say by way of background for the rest of you, the 
reason the labor standards issue is so big is that there was a report 
issued in this country last year that indicated that the Caribbean Basin 
Initiative of the United States, where we tried to get investment in 
Caribbean countries and put plants down there, had not led to increasing 
the per capita incomes of the people working in those businesses; that 
because the people were so poor, that a lot of the people who had taken 
the money that the United States Government had put out had still 
depressed their wages and increased their profits. So we've given some 
thought to this labor standards issue here and the environmental issue. 
So I think if we get those agreements that will help.
    The second thing that will help is if--we have to just make the 
case, you know. Now when we have an agreement, it's a lot easier to 
defend the jobs argument. Right now there's a simple argument against 
NAFTA being waged by, articulated by Mr. Perot in this country and 
others, that you can't make a trade agreement that takes down all the 
barriers with a country on your border with a per capita income that's 
only one-eighth as much as yours is. Everybody will take their money and 
invest in the other country. Well,

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it has great superficial appeal, but the truth is that anybody who wants 
to go to Mexico and invest their money for low wages can do so today. 
But the market opening measures that have been taken by President 
Salinas in the last few years have led the United States from a $5 
billion trade deficit to a $6 billion trade surplus with Mexico. Mexico 
is now our second biggest purchaser--manufacturer. And we are in 
effect--because Canada, as you know, is our biggest trade partner--we 
are now building this hemispheric economic bloc that we want. And so I 
think we can refute it on the merits.
    The third thing we have to do is ask the economists to consider what 
will happen if we do not pass the trade agreement. Our relationships 
with Canada are secure, and we have a bilateral agreement, and that's 
fine. But we could go back in our relationships with Mexico, which would 
mean economic problems for Mexico, more trade barriers, fewer jobs in 
America, more illegal immigration. A lot of problems could develop for 
the United States if we do not do the NAFTA.
    I think when those three things become crystal clear, we will 
prevail there.
    Now on the larger issue, there is no easy or simple answer to the 
conflict between the environment and the economy in any of our countries 
individually or in the globe as a whole. However, I believe that our 
goal ought to be to find ways to make preserving the environment good 
economics.
    At the Rio conference last year, Japan, Germany, and many other 
European countries were proving that you could do that because they were 
down there promoting environmental technology while the United States 
was trying to stop the environmental agreements. I think that our 
country was not as wise as many of the nations here represented in the 
way they approached the Rio conference. We have now signed on, the 
United States has, to the Biodiversity Treaty. And we have basically 
adopted a policy of long-term environmental preservation with an 
aggressive effort to figure out how to make jobs and incomes and 
prosperity flow out of that. And I believe that there are lots of 
opportunities to do that.
    If I might just mention one, our bilateral aid package to Russia 
that is now making its way to the Congress focuses heavily on what we 
can do with our technology to help them to reduce the problems that 
their nuclear industry--and not simply their bombs but their nuclear 
power plants, for example--present to them, and what else we can do in 
the area of energy and the environment to help to clean up their 
environment in ways that are good for their economy and good for ours. 
So I think there's a lot of opportunity there.

Uruguay Round and the G-7

    Q. You just said in the beginning, Mr. President, that you hoped 
that Tokyo would, and I quote you, increase the chances of successfully 
concluding a Uruguay round by the end of the year. Can I turn that 
around and say do you think that a failure to do that would seriously 
jeopardize the whole G-7 process as it currently exists?
    The President. Well, there are lots of other nations involved in the 
Uruguay round apart from the G-7. That was one point that Prime Minister 
Balladur made to me in our meeting here.
    But I think that our job is to lead. And I know it is difficult to 
lead when you have troubles yourself. All of us have economic troubles. 
All of us, to a greater or lesser extent, have some political conflict 
within our countries. But I think that it is very important--and almost 
to change the atmosphere and the attitudes of the peoples of the G-7. 
Yes, we're having economic trouble. And the fact that we're all having 
it should be some indication that there is some sort of historic change 
going on here and not that there's some character flaw in our people or 
some great mental breakdown in our countries or something else. This is 
a tidal wave of global change going on here. But look at the resources 
we have: We have innovative work forces; we have great bases of 
technology; we have an understanding of how the world works 
economically. And I think we have within our power the means to move 
forward and break out of this problem we're in but only if we have the 
courage to keep changing.
    And so I would say, to try to answer your question directly, there 
have been debates for years about whether the G-7 process accomplishes 
anything. But if nothing else, if

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we can agree among ourselves to take an expansive view of the future and 
to talk about the strengths of our nations and to recognize that there 
are only three ways to grow our economies. One is through the changes we 
make internally, the microeconomic changes; the other is through 
coordinating our larger macroeconomic policies; and the last is through 
creating a more open system of trade so that there is global growth. 
It's hard for the wealthy countries to grow wealthier unless the people 
below us are getting wealthier and can buy more of our products. It's 
not a zero-sum game. And so I feel very strongly that we ought to come 
out of the G-7 with a more vigorous commitment to get the Uruguay round 
done.
    Now let me just say what I have done in that regard. I have 
repeatedly said that the United States would bend over backwards to get 
that done this year, that there are changes that we would like to make. 
When the G-7 finance ministers and central bank heads were here not very 
long ago at Blair House across the street, I went over and personally 
met with all of them and reaffirmed my commitment to this. So I don't 
know what else I can do, except that I think a lot of this is a matter 
of attitude. We have to try to lift our own visions and lift the spirits 
of our people and realize that when you're in difficulty, the worst 
thing you can do is to hunker down, to withdraw.
    When you have difficulties like this with a fundamentally sound 
system, the time is to change, to be innovative, to be creative, and to 
reach out. And I think that's what we've got to begin to do at the G-7. 
The tone, the atmosphere, the ideas that are discussed in that sense may 
be far more important than anything specific that comes out of the 
communique. What direction are we going to take the world in?

Global Economy

    Q. Mr. President, nobody seems to be happy with the G-7 process, not 
to mention the results. I wonder if you could define for us--elaborate 
on what you just said--that the purpose of the G-7 in today's world and 
tell us what you would like to change.
    The President. Well, I don't want to be too presumptuous, since I've 
never attended one before. I've only read about them before. You know, I 
always followed them very closely. But what we are striving for--I think 
the other leaders agree with me, including those like Chancellor Kohl, 
who's been to many of these. My own view is there ought to be enough 
time at these G-7 meetings for a serious discussion among the leaders 
without a lot of bureaucratic procedures and rules and regulations about 
these big issues. What about the crisis in the wealthy countries 
creating jobs? What can we do to create more jobs? How do you explain 
the fact that France, for example--let's take France. France had a 
productivity growth rate that was the highest in Europe in some of the 
years of the late eighties and still had relatively high unemployment. 
The United States, which has far fewer labor supports than most of the 
European countries do, still has difficulty getting its unemployment 
rate below 7 percent. We're well into 2 years after the worst of our 
recession, and yet we are 3 million jobs behind where we would 
ordinarily be at this point after a recession.
    We should discuss these things, and we should think about whether we 
can learn things from one another about how to create jobs in the west. 
We should be able to really talk through very frankly what the political 
and other economic barriers are to getting the GATT done and really 
think about it and talk about it. It's far more important than what's in 
the specific words of the communique, whether we come out of there with 
some sort of commitment to do something, to take action, and to move.
    And finally, I think we ought to really focus on how our individual 
economic strategies may not work as well unless we are coordinated. Let 
me just give you one example. I'm trying to do something that our 
country has not done before. We are trying to dramatically cut our 
Government deficit at a time when our economic growth is slow. 
Traditional economic theory would say if you have a sluggish economy, 
you don't cut spending and raise taxes; you might do the reverse, right? 
Why am I trying to do that? Because we're in a global economy, and the 
United States deficit caused an imbalance in the global economy, okay? 
But now, this can work for us for a while just on our own, be- 

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cause we had so much debt in the 1980's accumulated at high interest 
rates, by bringing down the deficit, interest rates in America have 
dropped very low. So businesses and homeowners are going out now and 
refinancing their debt, and that puts a lot of new money into our 
economy. So I can get a little bit of growth just on what we do here. 
But in the end, this will only work if there is an expansionary policy 
in Japan, if Europe is able to resume a higher level of growth so that 
the system is brought into balance, because what we do has a 
complementary action in the rest of the G-7.
    So these are the things, it seems to me, that really matter. And 
that's why I think these G-7 meetings can really make a difference. But 
I think that if we get all hung up on--you know, we all have to have 
these prepared statements, and we're afraid we're going to say one word 
out of the way or make one little mistake which makes a huge headline in 
some country. And then we've got to have every little word right in 
these communiques. I think that's just--that takes a lot of time and 
energy away from what we should be doing, which is focusing on how we 
can make the lives of our people better and fulfill our responsibilities 
as leaders of the world.

U.S. Leadership

    Q. Mr. President, you said earlier, speaking of G-7 leaders, that 
their job is to lead. Yet there's a broad perception that there is real 
friction and misunderstanding and doubts about U.S. willingness to lead, 
not only in the Japan-U.S. relationship, but in the U.S.-European 
relationship. Why has this happened and what can you do at the summit to 
clarify U.S. goals and reassure U.S. allies?
    The President. Well, let me first of all take issue with you--I 
mean, not the perception.
    The other nations of the world have asked the United States for 
years and years and years internally to do one thing. The only thing 
they ever asked of us internally was to do something about our budget 
deficit, which caused a significant imbalance in the global economic 
relations. I read about it for years before I became President. And 
we're doing that, and it is very tough to do in tough economic times. 
And we're going to wind up with a very tough deficit reduction plan that 
we believe is good for our economy over the long run. And it's not been 
easy to do, but we are doing that.
    Secondly, the major crisis this world has faced since I've been 
President, I think, was what would happen to democracy in Russia. And 
when it became apparent that democracy was in trouble in Russia because 
of what was happening with President Yeltsin, I immediately publicly 
supported him. I called every other leader in the G-7 and many others 
around the world and asked for people to support him. We all did. And I 
think that we had something to do with the outcome of events there.
    I announced a $1.6 billion aid package to Russia, and we have now, 
by the way, obligated well over half of that money. And then I announced 
another $1.8 billion bilateral aid package to Russia which passed the 
House of Representatives with 75 percent of the vote almost last week, 
bipartisan support. It's going to fly through the Senate. The IMF gave 
their first installment, $1.5 billion, to Russia the day before 
yesterday, and we're going to discuss that at the G-7 summit. I think--
and that's a huge potential market for all of us and a major political 
issue. And I think that is the big issue we have faced, and I think 
we've done it very, very well.
    Now, the only point of contention between us that I can see--we'll 
come back to the Japanese issue; you asked that and I haven't 
forgotten--but the only--in Europe is that we have not agreed entirely 
on how to handle Bosnia, although we've done a lot of work together. The 
United States has spent almost $300 million in humanitarian assistance. 
We have strongly enforced and pushed for tougher sanctions and embargoes 
on Serbia. We believe and the Germans believe the arms embargo ought to 
be lifted on Bosnia. France and Britain and Russia disagree. I 
understand that. But that doesn't mean we can't do anything together. We 
are trying to work together. And this, I think everyone would admit, is 
the most difficult international problem that we face. I'm still hopeful 
that something humane, decent, and politically reasonable will emerge 
from this process before it's too late. But we all have a disagree- 

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ment on that, and I'm sorry we do. But we can't agree on everything. And 
this is a very difficult problem. I still think I was right about what 
was the best course. I think events subsequent to the Athens meeting 
prove that beyond question. But nonetheless, I don't think that's a 
reason for us to give up on the European alliance, give up on NATO, give 
up on the G-7. This is a tough problem.
    With regard to Japan, I think everyone who has looked at the problem 
seriously thought there would have to be some realignment in our trade 
relations. And I think we're going to work that out. But there are lots 
of other things we have in common. Japan has supported the United 
States, and the United States has supported Japan in the things we've 
done to support democracy all over the world. Our security relationship 
is very strong. I intend to reaffirm my commitment to that when I'm in 
Japan, and my commitment to Korea and to Asia generally when I'm in 
Korea.
    So I think a lot of this--let me--if I might, a lot of this 
uncertainty in Europe, particularly, is a function of two things. One is 
the economic problems that we all have which make people always just 
more insecure. And two is, I've only been President 5 months. And we 
have a new Government in France. We have a new Government in Italy. We 
have a new Government in Canada. And so a lot of these folks, we don't 
all know each other. And I think when people don't know each other, 
there is always a--but you're trying to get to know one another--there 
is the temptation to take whatever incident is in the moment and reach 
some huge encyclopedia of meaning in it, which may or may not be 
accurate.
    So I think a lot of these things that you're talking about will be 
taken care of by meetings like this, by trips like this, and by constant 
working together. I will say--but every opportunity I've had to work 
with the other European leaders has been satisfactory. I had good 
cooperation between the United States and Italy, for example, when we 
were trying to reinforce the security of the U.N. forces within Bosnia, 
because the U.S. is committed to defend them if they're attacked, and 
everybody knows that. So I'm just a lot more hopeful about this than I 
think some are. I think a lot of this is just a function of economic 
difficulties and new players who don't really know each other thoroughly 
yet.

Trade

    Q. Mr. President, if I may go back to trade, I would like to know 
what do you say to the French, who have decided that they won't sign 
anything regarding GATT at the Tokyo summit up until the United States 
lifted or the Department of Commerce lifted the sanctions of steel, and 
we insisted that the United States accept the principle of multilateral 
mechanism to solve commercial conflicts.
    The President. Well, those are two different issues. First of all, 
the action that was taken on steel was taken after a lot of 
deliberation, most of which was done before I became President, 
subsequent to United States law, which is clearly GATT-consistent. So, I 
think, you know, if the belief is that the United States has been wrong 
on the facts, then we can discuss the facts. But there is nothing wrong 
with our law, and it's not that different from the laws of a lot of 
other countries that are part of the world trading system.
    Secondly, with regard to the trading mechanism, I have no problem 
with a multilateral mechanism to enforce trading agreements. But the 
GATT clearly contemplates that every country in the world, including 
France, should have the right to act in its own interest if the 
international system breaks down, which is not to say that you lose some 
rulings. But if there is no resolution of a crisis, the international 
system breaks down. All our Section 301 trade law does is to provide for 
some ultimate reservoir of authority for the United States to act 
unilaterally if the system itself breaks down. If France, for example, 
would like to propose a stronger multilateral decisionmaking process as 
a part of GATT before any country could act on its own, I would be more 
than happy to discuss that.
    I do not see this Section 301 as giving the United States the 
authority, for example, to decide on its own about all these trade 
agreements and how they affect us without regard to what other countries 
want to do. That is not at all the way it is supposed to operate. It's 
supposed to operate only against coun- 

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tries that are not part of trading agreements at all, so we don't have a 
trade--countries with whom we have no multilateral agreements, or when 
there is a total breakdown of the GATT system in this case.

Bundesbank

    Q. Mr. President, you raised today for the first time, I think, the 
question and the very important question of the structural impediments 
to growth. And so far you have and your Government has somehow created 
the impression that Europe and the difficulties in creating jobs should 
be loaded at the doorsteps of the Bundesbank. And yesterday you even 
said, ``Well, this is a contribution to global growth.'' And you raised 
the expectation and the--that it was just a cyclical problem. Now, why 
didn't you come out before with this very strong statement that you are 
looking for structural impediments, that the G-7 should concentrate on 
doing away with structural barriers instead of pushing all the time the 
micro question--the macro question, excuse me?
    The President. Well, first let me say that I have not criticized 
Germany in the past, but I have complimented them when the Bundesbank 
has lowered interest rates. [Laughter]
    Q. But maybe for different reasons.
    The President. And I know that because I realize that, first of all, 
all nations with independent central banks--and the United States has 
one, too; that is, the Federal Reserve--independent of the--all nations 
that have independent central banks are very sensitive about political 
leaders from within the nation telling them what to do and even more 
sensitive to suggestions from political leaders outside the nation's 
borders. And so what I have attempted to do is to say repeatedly, ever 
since I became President, that I thought that the extent to which we 
could coordinate the economic policies with Germany and the rest of 
Europe, and Japan, that that was a good thing. Coordinated economic 
policies for growth, and expanded trade, and smarter internal, 
microeconomic policies were all necessary to create jobs and growth in 
the world.
    And when Germany--when the interest rates were lower a couple of 
days ago, I did applaud that because I think it makes a contribution to 
growth. But I think--and the only reason that I--and I have done it not 
to be presumptuous but only to say that the United States was asked for 
years by its allies to deal with our budget deficit. We are now doing 
that, and we are getting the results that we hoped we would. We have a 
20 year low in long-term interest rates, in home mortgage rates. We've 
had a 6 year high in housing sales. It's tailing off a little now but 
good housing sales. We've created more construction jobs in the first 4 
months of this year than in any similar period for 9 years.
    And the point I'm trying to make here is that there is a limit to 
what we can do for ourselves, and therefore what we can do for Europe 
and Japan in terms of buying more of your exports, unless all of us work 
together to promote growth. And obviously, because of the sheer size of 
the German economy and the power of Germany as an exporter, the 
condition of the German economy is critical to what happens to 
Americans. And you've had a very open trading philosophy. So I thought 
it was a positive thing, and I thought I should compliment it. But I 
think it's a delicate thing to talk about, because all of us who have 
ever suffered from runaway inflation have appreciated some measure of 
independence in our central banks. And yet all of us know that if the 
central banks are entirely insensitive to the economic growth needs of 
the country, we can't coordinate the strategy. So it's a delicate 
matter. And I don't wish to be seen as interfering, but I think when a 
bank does something that's clearly a plus for the German people and for 
all the rest of the world, it's not wrong for an American President to 
compliment it.

Note: The interview began at 10:45 a.m. in the Oval Office at the White 
House. Journalists participating in the interview were Graham Fraser, 
Toronto Globe and Mail, Canada; Alain Frachon, Le Monde, France; Carola 
Kaps, Frankfurter Allgemeine Zeitung, Germany; Rodolfo Brancoli, 
Corriere Della Sera, Italy; Osamu Shima, Yomiuri Shimbun, Japan; Jurek 
Martin, Financial Times, United Kingdom; and Paul Horvitz, International 
Herald Tribune. A tape was not available for verification of the content 
of this interview. This item was not received in time for publication in 
the appropriate issue.

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