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II. New Economy -
Opening Markets and Expanding Trade
President Clinton understands
that future prosperity in the United States depends on our ability to compete and win in the global
economy. He has steadfastly and consistently worked to open foreign markets and expand trade -- to
create jobs here at home.
Twenty-seven percent of our economy is now dependent on trade. Over 11
million workers in this country owe their jobs to exports. These jobs pay higher wages, on average,
than jobs not related to trade. Clearly, expanding trade is critical to our effort to create good,
January 1, 1994 marked the launch of a
historic trade agreement between the United States, Canada,and Mexico.
The North American Free Trade Agreement will reduce barriers to U.S. exports in our first and
third largest export markets and expand opportunities for U.S. businesses and workers. It forges
a partnership with our neighbors that fosters prosperity for all three nations.
The Uruguay Round to the General Agreement on Tariffs and Trade is the largest, most comprehensive trade agreement in history. It will cut foreign tariffs on manufactured products by over one-third overall -- a $744 billion global tax cut -- and eliminate tariffs in major markets in a number of sectors in which the United States is particularly competitive. It will extend world trade rules to services, such as engineering and construction, greatly expand export opportunities for U.S. agricultural products, and level the playing field by binding all nations to
the same trade rules.
Japan is our second largest trading partner and the second largest economy in the
world. Yet sixty percent of the entire U.S. trade deficit is with Japan. Clearly that deficit is
the result of barriers to U.S. and other foreign goods in the Japanese market. Determined to open
the Japanese market, President Clinton set our negotiations with Japan on a new course under the
Framework Agreement in July 1993. Since then, we have reached 14 agreements with Japan which have
expanded opportunities for U.S. businesses and firms and fostered job growth. Improving our trade relationship with Japan and leveling the playing field has been -- and will continue to be -- one of our highest priorities. That is why we've stood firm to open Japan's auto and auto parts market to competitive foreign products. Taking action under Section 301 and initiating a case in the World Trade Organization, we are determined to remove barriers to trade in this sector which is so important to the U.S. economy. (Nearly 2.5 million Americans work directly in or supply the U.S. auto and auto parts industry, which accounts for 5% of the U.S. GDP.
China is increasingly important as a market for U.S. goods and services and as a major exporter. Sweeping economic reforms have contributed to an explosive growth of income and trade. Yet China remains a closed market to U.S. exports and our trade deficit with China has grown, reaching $29 billion in 1994. We are committed to opening China's market and to ensuring that they follow international trading rules. In February 1995, we concluded an
agreement which will provide protection in China of intellectual property rights for U.S.
companies. Bringing China into the international trading system will foster growth in both
countries and assist China in becoming a more open, democratic country.
Asia Pacific Economic Cooperation
Pacific region has the fastest growth in the world -- three times the rate of the established
industrial countries. By the year 2000, the East Asian economies will form the largest market in
the world, surpassing Western Europe and North America. This growth has led to an explosion of
trade with the United States. East Asia is the number one export market for U.S. products. Our
exports to Asia account for over 2 million jobs in the United States. President Clinton has
pressed to expand trade with this vibrant region. In November 1994, leaders of the APEC nations
agreed in Bogor, Indonesia to eliminate barriers to open trade in the Asia Pacific region by 2020.
Free Trade Area of the
Latin America is the second fastest growing economic region in the world. U.S. exports to Latin
America jumped from $30 billion in the mid-1980s to over $90 billion in 1994, creating over
600,000 new U.S. jobs. U.S. exports to Latin America now approximate our exports to the European
Union, and, if trends continue, may reach $232 billion by 2010, greater than our combined exports
to the E.U. and Japan. Recognizing these opportunities, President Clinton hosted the Summit of the Americas last December in Miami, the first time in 30 years that the nations of this hemisphere have gathered together. The 34 democratically elected leaders agreed to construct The Free Trade Area of the Americas, or FTAA, by the year 2005.
Forging trade agreements to open
foreign markets is just one part of the effort. We must also make it easier for companies to
export. Through the National Export Strategy, the Clinton Administration has liberalized controls
on the export of over $32 billion of computers; facilitated the promotion of exports through
one-stop shops, which provide information on all Federal export promotion programs; coordinated
a strategy to secure more than 70 contracts worth more than $17 billion for U.S. firms; and sought
to expand trade finance programs.