Presidential Radio Address - 13 September 1986

by Ronald Reagan

My fellow Americans:

Our country, since the close of the Second World War, has been a champion of free commerce between nations. Free trade has served us well, fueling economic growth and job creation across our land. However, as we've spoken about before, it's imperative that trade between nations be fair as well as free. At a time when our trade deficit is far too high, we can no longer tolerate one-sided trade relationships.

In the last year we've been moving aggressively on a number of different fronts to meet the trade deficit challenge. We've worked to pry open the closed and sheltered markets of our trading partners, bringing unfair trading actions when called for. Progress has been made on this front. We've also worked to restore a value to the dollar that reflects economic and competitive realities and that will enable American businessmen and farmers to compete more effectively in world markets. Here, too, we've made considerable progress, as the substantial adjustment of the dollar against the Japanese yen, the German mark, and other European currencies indicates.

Finally, we agreed last May at the Tokyo summit to improve economic policy coordination. In that spirit, we've been urging others, especially those with large trade surpluses, to adopt growth-oriented policies at home, enabling their citizens to buy more American products and other imports. The answer to our trade balance problem is not to close our markets, cut imports, or collapse trade. Millions of American jobs are tied to imports. The way to a better life is to open markets now closed, improve trading conditions, and to expand our exports. We learned that lesson half a century ago when we tried to balance the trade deficit by erecting a tariff wall around the United States. The Smoot-Hawley tariff ignited an international trade war and helped sink our country into the Great Depression.

Today we're taking a positive approach. We're working with all our trading partners to improve the situation and, at the same time, keep international commerce flowing. That's why you and I and every American have a stake in the new round of global trade talks taking place this week in Punta del Este, Uruguay. Our Trade Representative, Clayton Yeutter, as well as Secretary of Agriculture Richard Lyng and Secretary of Commerce Malcolm Baldrige will be there fighting hard to open markets which are now closed to our goods. One of our major priorities at the talks will be addressing the mutually destructive practice of subsidizing agricultural exports. Friendly nations, trying to help domestic producers, are undermining the well-being of farmers all over the world; and American farmers are some of the hardest hit. The situation is intolerable, and we expect to have it corrected.

Our country is also victimized by the international theft of American creativity. Too many countries turn a blind eye when their citizens violate patent and copyright laws designed to protect intellectual property rights. If we permit the product of our best minds to be stolen, we will pay the price in ingenuity, vision, and creativity-the core of all human progress. Here again, we expect tangible changes to be made to straighten this matter out. Another unavoidable issue at the trade talks is the barriers countries erect to interfere with trade in services, such as banking, telecommunications, and insurance. The service end of our economy is growing dramatically, and in this modern age there is no reason to cordon off a vital arena of economic activity from international competition. Most governments that restrict economic activity do so out of the mistaken notion that they're serving the interests of their people. Some governments go to enormous lengths to discourage foreign investment. The end result of this absurdity is industrial stagnation: no new factories, no new development, and no new jobs. We want to see a freer flow of investment resources between countries.

Finally, our representatives at the trade talks will be trying to improve procedures for settling disputes in international commerce. Our position is clear: The playing field should be level, the ground rules should be set, and all players should stick to the rules. When a dispute arises, it should be settled, not ignored. We're attempting at Punta del Este to lay the foundation for the next decade of world trade, a decade that will carry the United States and the world into an unparalleled era of growth and prosperity. We must make certain that all mankind benefits from a healthy and robust international trading system, one that is both free and fair. That's what we're aiming at.

Until next week, thanks for listening, and God bless you.