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Remarks to Business Leaders at a White House Briefing on the Canada-United States Free Trade Agreement

November 04, 1987

Well, welcome to the Old Executive Office Building. It's even older than I am. [Laughter] I know you've already been briefed by Ambassador Yeutter and Secretary Verity, so I'll try to keep my remarks concise. Whenever I do go on over-long, however, I remember what Dwight Eisenhower used to say: that one of the best things about being President is that no one can ever tell you when to sit down. [Laughter]

In this world there are many conflicting visions of man's economic life. You know the old saying: Ask three economists a question-you get seven different answers. But beyond the fine-tuning of experts, there's a more fundamental division of world views. One sees the resources and potential of this world as finite, and most likely insufficient for the needs of a growing humanity. It posits a world of limits and describes not only a present of insufficiency but a future of increasing scarcity, and insists on cruel but, in its view, necessary choices.

That's the life raft view of humanity. We're adrift here, at the mercy of natural forces, our food is running low and not much hope of rescue. In the meantime, we don't have room for the luxuries of the past. In fact, to keep from sinking, we may have to throw them overboard. And it's our freedom that is always the first luxury to be jettisoned.

Thankfully, that deeply pessimistic view that I have just cited here has never really taken hold in North America. Maybe it has to do with the type of people who came here, immigrants and refugees all, fleeing from various forms of unfreedom. Maybe it was the object lesson of a vast and mostly unexplored continent that instilled in our souls a basic disbelief in limits and impatience with those who insist on trying to impose them—whether it's bureaucrats telling us what we can and can't do or academics talking of limits to growth.

It's like the story of the New Hampshire farmer who had just been to a meeting down in the town hall of the local Communist Party. He comes back all excited and tells his friend about how wonderful communism is because, in that system, everyone shares everything they own. "Does that mean, Fred," asks his friend, "that if you had two houses you'd give me one?" "That's right, John," he says, "I'd give you one." "And does that mean, Fred, that if you had two tractors you'd give me " "That's right, John, if I had two tractors, yes, I'd give you one." "Does that mean, Fred, that if you had two hogs you'd give me one? .... Now, that ain't fair, John. You know I got two hogs." [Laughter]

Well, whether we're skeptical Yankees, or recent immigrants to the Sunbelt, we know too much about America to believe in limits, to believe that the future isn't ours for the making. There's too much hope, too much possibility on this continent of ours for us to believe in the zero-sum philosophies of the Old World. Whether it's communism or socialism or what used to be called social Darwinism, we know that one person's achievement doesn't subtract from another, but adds each to the other in an expanding cycle of prosperity. Of all the zero-sum philosophies that have gripped the Old World, one of the most destructive has been mercantilism—that's a 17th-century version of protectionism. It saw trade as a form of economic warfare—usually bloodless, but not always—with powerful nations preying upon the weaker, drawing off their wealth and then hoarding it within their own boundaries.

In this, the bicentennial year of our Constitution, we look back in wonder at the feat of imagination that designed our democratic institutions, so responsive and flexible, yet enduring. But perhaps as great an intellectual break with the past, as great a leap of progress, was the rejection of the mercantilist philosophies—or hostilities, I should say—that had been tearing our young nation apart, and the establishment of free and unfettered trade among these newly united States.

Today, we're poised to make another great leap of progress by creating free trade anew between our country and Canada. Already, our two nations generate the world's largest volume of trade. Canada is by far our largest trading partner. The United States exports more to the Province of Ontario alone than to the entire country of Japan.

United States citizens are by far the principal foreign investors in Canada. And Canadians, on a per capita basis, are even greater investors in this country. And this two-way traffic in trade has helped to create jobs by the millions, expand opportunity for both our peoples, and augment the prosperity of both nations. With this agreement, we'll be the largest free trade area on Earth. As Prime Minister Mulroney has said, "It will bring us to a new decade and a new century, on the leading edge of the world's trade and commerce."

We're tearing down the walls, the tariffs, that block the flow of trade and eliminating the tangle of restrictions and regulations that bind our commerce and inhibit economic cooperation. As this agreement takes effect, Americans and Canadians will conduct business, invest, and trade where they like. Two proud, independent, and sovereign nations—Canada and the United States—will pull together as partners toward a future of economic growth and prosperity. Rejecting beggar-thy-neighbor policies in order to build with our neighbors—putting aside special interests in favor of the common interest, this agreement will be a win-win situation, not only for the United States and Canada but for the world.

We have broken new territory by covering areas, such as investment and services, traditionally beyond the scope of trade agreements. What better model could there be for the Uruguay Round, which is currently underway in Geneva. But success will depend in large part on people like you who are willing to operate in a truly free environment for trade and investment. And I'll be looking for your support in obtaining congressional approval for this historic, path-breaking agreement.

Last spring, I visited Prime Minister Mulroney in Canada and was honored to speak before the Canadian Parliament. There I spoke of this visionary agreement as an example to all nations. To those still tempted by protectionism—who would retreat into economic isolationism—we'll show there is a better and a more expansive way. To those who think this world is a zero-sum equation, who view their neighbors with worry and distrust, we'll show the path of cooperation. And we'll show how freedom is the most valuable resource, free economies and free trade—that the wider our embrace of freedom, the greater will be our prosperity.

You know, some time ago—way back in those prehistoric times known as the seventies—I called for what I named a North American accord that would embrace our whole continent—the United States, Canada, and Mexico, as well. I said then that it's time we stopped thinking of our nearest neighbors as foreigners. Let us instead think of them as partners, independent and sovereign, but united in a common purpose. Unity, I need hardly say, does not imply homogeneity. In a true alliance of friendship, the differences—the unique characters and national identities of our northern and southern neighbors—would only broaden our understanding and strengthen the mandate of freedom.

Now, I know it's bad manners to quote oneself, so please forgive me if I read you a few lines from that speech—the speech I delivered in November 1979, announcing my candidacy for President: "A developing closeness between the United States, Canada, and Mexico would serve notice on friend and foe alike that we were prepared for a long haul, looking outward again and confident of our future; that together we are going to create jobs, to generate new fortunes of wealth for many and provide a legacy for the children of each of our countries. Two hundred years ago, we taught the world that a new form of government, created out of the genius of man to cope with his circumstances, could succeed in bringing a measure of quality to human life previously thought impossible."

Let us dare to dream, I said, of some future date, when the map of the world shows a North American Continent united in commerce and committed to freedom. I say now it is time to dream even bigger dreams—dreams of an entire hemisphere, from the Arctic Circle to Tierra del Fuego, united by the bonds of democracy and free trade; an entire hemisphere in which all the borders become what the U.S.-Canadian border is today—a meeting place rather than a dividing line.

When we look at the news, when we read history, it sometimes seems that wars and cataclysms dominate man's life. But, in fact, that is a misperception. It is in the peaceful, everyday business of work and trade that the real story of human progress unfolds. I am confident that when people look back on this pact it will stand out as one of the premier achievements of the 20th century, not just a free trade agreement between two nations but the catalyst of a hemispheric, perhaps world, revolution—a peaceful revolution of expanding freedom and growing friendship between nations. That's why I pledge to you that this achievement, great as it is, will be only the beginning. We will, together with our new partner in peace and freedom, Canada, carry the banner of free trade to Mexico, to the Caribbean, and all of Latin America—and from there on around the world.

You know, I can't help but think of a story, a few years ago, when I was connected with a place called Hollywood, and Hollywood-made motion pictures played 90 percent of the playing time of all the theaters of the world. And so, when Mr. Johnston, the head of the Motion Picture Producers Association, made one of his visits abroad, he went to Poland. And he took along a few movies, and he showed them to the Minister of Education.

Now, one of them was a movie that I escaped being in, and Dennis Morgan did the part I was going to do. [Laughter] But it was with Ann Sheridan, and they played two workers at Lockheed aircraft plant, which was only a few blocks from Warner Brothers Studio. And one of the scenes in the picture called for them to be at the lunch hour out in the parking lot, playing a scene together, talking together.

And at that point, the Minister of Education of Poland grabbed Johnston's arm, and he says, "There, there—that's what we won't stand for." He said, "That kind of propaganda." And Johnston said, "What are you talking about?" He says, "All those automobiles in the background. Are you trying to tell us poor Poles that the Americans who work in that factory drive those cars to work?" Well, that wasn't part of the set at all, that just happened to be there. That was the Lockheed parking lot- [laughter] —and those were the cars of the Lockheed workers.

And, you know, it's just increasingly struck me that we're trying to build a world of undeveloped nations and make them believe that their only progress, economic progress, must be in exporting. Well, what would happen today if all the countries of the world could be like ours and the people who made all these wonderful products were also the customers who bought them and could afford to buy them?

There aren't too many countries where that's true. Ours is, yes, we're the biggest exporter in the world. And yet, we have a trade imbalance because we also buy more than anyone else, into the country. But again, our biggest market happens to be our own people. And when that becomes more worldwide, we're going to find that a lot of the economic problems of the world go away.

I don't know why I brought that up, except that I just came from a meeting talking about the present situation here with the deficit. [Laughter] But anyway, I just want to thank you all here, and God bless you all, and hope that we can make this particular agreement go and show the way. If 200 years ago the Constitution came into being, in large part, because the 13 Colonies that had become States of the United States still thought of each other as a foreign country and, therefore, had tariffs and all kinds of obstructions to trade across the borders, and now we've eliminated all of that with our Constitution, and here we are with 50 States trading freely with each other, why wouldn't that fit with other countries, too? Particularly here, the neighbors on our own continent—and why wouldn't it work?

Well, I think we've made a start with this agreement. And I hope we all have your help in making it come to be a reality. Thank you very much.

Note: The President spoke at 2:11 p.m. in Room 450 of the Old Executive Office Building. In his opening remarks, he referred to the United States Trade Representative Clayton Yeutter, and Secretary of Commerce C. William Verity, Jr.

Ronald Reagan, Remarks to Business Leaders at a White House Briefing on the Canada-United States Free Trade Agreement Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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