[Weekly Compilation of Presidential Documents Volume 31, Number 4 (Monday, January 30, 1995)]
[Pages 115-117]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks to the World Economic Forum

January 26, 1995

    Good evening, and thank you, Professor Schwab, for that 
introduction. I'm pleased to join all of you, especially Secretary-
General Boutros-Ghali, Councillor Cotti of Switzerland, and Prime 
Minister Carlsson of Sweden. And I'm delighted to have this opportunity 
to speak to the World Economic Forum.
    Let me begin by saying I've very much enjoyed listening to the 
questions you asked the Secretary-General and to his answers. I was 
profoundly moved by the wisdom of his answer about the media. I wrote it 
down, and now I will use it in the next press conference. I noted you 
also talked about the academic wisdom and the media power represented in 
your group. I hope also there is academic power and media wisdom in your 
group.
    The thoughts that you shared and the projects that grow out of your 
meetings clearly are going to play a vital role in determining the 
issues that dominate all of our international agenda. Your opinions will 
play a key part in shaping the debate on some of the most important 
issues of our time.
    Two years ago, I took office with the strong conviction that the 
American people, as all the people of the world, were facing a new and 
rapidly changing global economy. I believed then, and I believe more 
strongly now, that the incomes and living standards of Americans are 
tied directly to what happens outside our borders. It is now impossible 
to separate international and domestic economic concerns. As soon as our 
administration began its work, we devised a detailed strategy to set a 
new direction. And during the last 2 years, we have devoted ourselves to 
preparing our country and our people for this global economy and to 
creating an international system of free and expanding trade that 
benefits not just the American people but all the world's people.
    We've made good strides. The essential first step for us was to put 
our own house in order. Let's not forget that, 2 years ago, it was a 
very open question whether the United States could summon the political 
will to cut our deficit significantly. But as many of you who specialize 
in global economics had urged for years, we changed that dynamic. We did 
the hard work. We cut the deficit dramatically, more than $600 billion, 
or about $10,000 for every family in our country.
    This year, the deficit will shrink for the third year in a row, for 
the first time since Harry Truman was the President of the United 
States. Cutting the deficit has helped us to create almost 6 million new 
jobs in the last 2 years, to keep the inflation to 2.7 percent and to 
boost our exports by 11 percent. The combined measure of unemployment 
and inflation is at its lowest point since 1968. In fact, a survey of 
your own members last year concluded that the United States is now the 
most competitive economy on Earth, and we appreciate that, and we're 
going to do our best to keep it that way.
    To ensure that, we know we must continue to invest in our own 
people, to empower individuals to take advantage of the opportunities of 
the global economy and to make the most of their own lives. Today, when 
exports account for so many of our high-skill, high-wage jobs and when 
what we earn depends so directly on what we know and what we are capable 
of learning, education is more important than ever before.
    That's why I proposed as part of my middle class bill of rights, 
that we make education and training more accessible than ever before in 
the United States, through a range of tax cuts for students of all ages 
and through a system of cash vouchers for people who have been laid off 
and must be retrained. Another part of our strategy has been to lay the 
foundation for a new era of global growth and open markets in the 
century to come.
    Already, after 7 years, we've made some real progress by adopting 
the GATT treaty. Those negotiations were begun here in the United States 
under Presidents Reagan and

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Bush. They were completed, they were approved by Congress, and I was 
proud to sign them into law last year. That's the most ambitious trade 
agreement ever.
    We also brought the NAFTA treaty into force with support from both 
Democrats and Republicans, and since then, trade with our NAFTA partners 
have accounted for 100,000 new American jobs. On the basis of the 
agreement forged at the Summit of the Americas last month, we've begun 
to create a free trade zone for our own hemisphere. And finally, we've 
extended our efforts to the booming economies of the Asia-Pacific 
region. At the APEC summit in Jakarta, we forged an agreement to create 
a vastly more open trade area there by 2020. All told, these 2 years in 
the United States have been one of the most intense and productive 
periods of economic innovation, both domestically and internationally, 
in recent times.
    But while the promise of these new arrangements is clearly enormous, 
their benefits will not simply fall into our lap. Indeed, with the 
completion of this array of trade agreements, we're entering a new and 
difficult phase of the global economy. Now, we face the challenge of 
turning visions into concrete realities, a time for painstaking efforts, 
for dismantling the old barriers and creating the new arrangements, 
brick by brick, for implementing these new trade pacts and completing 
the architecture of the international economy.
    It's also a time for careful reform. We must reexamine the 
international institutions that have played such an important role in 
the post-war era and consider how they are adapting to the new 
realities. These institutions have served us well for nearly half a 
century. In many respects, they still do. They have evolved with the 
changing world economy, discarding old missions and assuming new ones.
    But as all of you know, change in the world economy has taken on 
astonishing dimensions. Globalization has met the growth in 
interdependence on a scale that would have been inconceivable a decade 
ago, that richly rewards good decisions and good policies. But we've 
also seen that 24-hour markets can respond with blinding speed and 
sometimes ruthlessness that the statesmen of the Bretton Woods era never 
would have imagined.
    And for that reason, at last year's summit in Naples, my G-7 
colleagues and I saw the need to review our international economic 
institutions, identifying new needs and evaluating how best to adapt the 
institutions to meet the tremendous challenges of the 21st century. This 
review will be a central part of our discussions at the Halifax summit 
in June.
    In just the last few weeks, the crisis in Mexico has reminded us 
that the road ahead will have its difficult stretches. Mexico today has 
an economy with strong fundamentals and a capacity to grow and to meet 
its obligations. But partly because Mexico relied on too many short-term 
foreign loans, a fallen market confidence turned into a dangerously 
self-fulfilling prophecy.
    I am confident that the guarantee program we are putting together to 
put Mexico back on track will win approval in our Congress and will make 
a difference in the world economy. The combined leadership of the U.S. 
Congress, the Chairman of the Federal Reserve Board, and the Secretaries 
of Treasury and State are constructing a creative and unprecedented 
package. Some have said it's just foreign aid and a bailout. Well, 
they're not right. It's the kind of response to address a problem before 
it spreads that the new world economy demands.
    Failure to act could have grave consequences for Mexico, for Latin 
America, for the entire developing world. More important, our approach 
will safeguard hundreds of thousands of Americans whose livelihoods are 
now tied to Mexico's well-being. So it's the right thing to do for the 
rest of the world, but it's also the right thing to do for America.
    The crisis in Mexico has helped to show us again just how much 
smaller our world has become and how our stake in what happens in other 
countries has dramatically increased. This is not just true for economic 
affairs but also for a whole range of other problems, like attacking the 
capital movements by drug cartels and organized crime, dealing seriously 
with the interconnection of global terrorisms or environmental policies 
that have regional impact or social policies that bear on the global 
population issue.

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

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