Ronald Reagan picture

Radio Address to the Nation on Free and Fair Trade

May 14, 1988

My fellow Americans:

Yesterday Congress decided to send me a trade bill that threatens to destroy jobs and that would begin to reverse the policies of the last 7 years. After 3 years of hard work by the Congress and the Executive, it is unfortunate that I have no choice but to send this back to Congress. While there are many positive aspects of this legislation, some of its provisions would move us a step further toward protectionism. Others would create new bureaucracies. But my main objection to the trade bill involves the mandatory requirements it sets down for business to give advance notice of layoffs or plant closings.

Now, let me state very clearly that I believe businesses should give workers and communities just as much warning as they can when it looks as though layoffs or plant closings are going to become unavoidable. Advance notice gives the community and the workers themselves some time to begin adjusting. It's the humane thing to do. But when big government gets in the middle of something like this—dictating all its rules and regulations—well, the humane has a way of becoming inhumane. And what's intended to help everyday working men and women can actually end up hurting them.

When you study the plant-closing provisions of the trade bill, you see that there are circumstances in which they would actually force a business to shut down. Once a struggling business issued a notice that it is likely to close or substantially reduce its work force, then creditors, suppliers, and customers would disappear, eliminating any chance of survival the business might have had. Under these conditions, temporary layoffs are sometimes necessary to manage costs and production. And while the bill does contain a so-called struggling company exemption, this exemption is too vague and unclear to be workable. Then, too, businesses will be very reluctant to add workers when it would put them over the arbitrary thresholds in this bill and subject them to yet another regime of Federal regulation. Make no mistake, these concerns are very real. One independent study shows that if these provisions had been in effect between 1982 and 1986 America today would have almost half a million fewer jobs.

Yes, as I've said, our country should support advance notification of layoffs and plant closings. But this should be decided by bargaining between labor and management, not by some arbitrary rules laid down by politicians and enforced by Washington bureaucrats. And if I feel especially strong about this, I guess it's because I was a union president for years myself. There were times when the union, the Screen Actors Guild, took a hard line in negotiating with management. But, yes, there were also times when the motion picture industry was having its ups and downs, times when the union decided not to press quite so hard because we wanted to make sure the whole industry remained healthy and profitable. The point is, it was up to us, the unions and management, to run the motion picture industry together. We didn't need Washington in on this act.

I guess what it all really comes down to is this: Just what kind of a government do we want? For these past 7 years, the administration has limited government, cutting taxes and regulations alike. The result: the longest peacetime expansion in American history, unemployment at the lowest level in almost 14 years, the creation of 16 million new jobs. And I might add, in the last 3 years, four times as many businesses have opened as have closed. We could go back to big government, and indeed many of those in favor of these plant-closing provisions argue that they're already in effect in many European countries. Well, to tell you the truth, I'm sort of proud of being an American, proud that since 1983 the United States has created six times as many jobs as has Western Europe.

I don't want to leave the impression that the trade bill is completely bad. On the contrary, it contains a number of good and important measures, including new authority for American negotiators seeking to open markets abroad. It also included my proposal for helping workers affected by business failings by providing them with training, education, and job placement services-the truly humane approach. That's why I want a trade bill and why I so regret the addition of counterproductive measures that outweigh the positive features of this legislation. So, I urge Congress to schedule prompt action on a second trade bill immediately after it sustains my veto on this one.

And now one final message. At noon tomorrow in Washington, hundreds will gather to pay tribute to police officers and other law enforcement officials who've died in the line of duty. So, wherever you are at noon, I hope you'll join me in bowing your head and in resolving to let our law enforcement officials know that we understand what our mothers and fathers taught us: The policeman is our friend.

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

Note: The President spoke at 12:06 p.m. from Camp David, MD.

Ronald Reagan, Radio Address to the Nation on Free and Fair Trade Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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