Ignite a New Era of Global Economic Growth through Free Markets
and Free Trade
"When nations close their markets and opportunity
is hoarded by a privileged few, no amount-no amount-of development
aid is ever enough. When nations respect their people, open markets,
invest in better health and education, every dollar of aid, every
dollar of trade revenue and domestic capital is used more effectively."
March 22, 2002
A strong world economy enhances our national security by advancing
prosperity and freedom in the rest of the world. Economic growth
supported by free trade and free markets creates new jobs and higher
incomes. It allows people to lift their lives out of poverty, spurs
economic and legal reform, and the fight against corruption, and
it reinforces the habits of liberty.
We will promote economic growth and economic freedom beyond Americas
shores. All governments are responsible for creating their own
economic policies and responding to their own economic challenges.We
will use our economic engagement with other countries to underscore
the benefits of policies that generate higher productivity and
sustained economic growth, including:
The lessons of history are clear: market economies, not command-and-control
economies with the heavy hand of government, are the best way to
promote prosperity and reduce poverty. Policies that further strengthen
and market institutions are relevant for all
economiesindustrialized countries, emerging markets, and the developing
- pro-growth legal and regulatory policies to encourage business
investment, innovation, and entrepreneurial activity;
- tax policiesparticularly lower marginal tax ratesthat
improve incentives for work and investment;
- rule of law and intolerance of corruption so that people are
confident that they will be able to enjoy the fruits of their
- strong financial systems that allow capital to be put to its
most efficient use;
- sound fiscal policies to support business activity;
- investments in health and education that improve the well-being
and skills of the labor force and population as a whole; and
- free trade that provides new avenues for growth and fosters
the diffusion of technologies and ideas that increase productivity
A return to strong economic growth in Europe and Japan is vital to U.S. national
security interests. We want our allies to have strong economies for their own
sake, for the sake of the global economy, and for the sake of global security.
European efforts to remove structural barriers in their economies are particularly
important in this regard, as are Japans efforts to end deflation and
address the problems of non-performing loans in the Japanese banking system.We
will continue to use our regular consultations with Japan and our European
partnersincluding through the Group of Seven (G-7)to discuss policies
they are adopting to promote growth in their economies and support higher global
Improving stability in emerging markets is also key to global economic growth.
International flows of investment capital are needed to expand the productive
potential of these economies. These flows allow emerging markets and developing
countries to make the investments that raise living standards and reduce poverty.
Our long-term objective should be a world in which all countries have investment-grade
credit ratings that allow them access to international capital markets and
to invest in their future.
We are committed to policies that will help emerging markets achieve access
to larger capital flows at lower cost. To this end, we will continue to pursue
reforms aimed at reducing uncertainty in financial markets.We will work actively
with other countries, the International Monetary Fund (IMF), and the private
sector to implement the G-7 Action Plan negotiated earlier this year for preventing
financial crises and more effectively resolving them when they occur.
The best way to deal with financial crises is to prevent them from occurring,
and we have encouraged the IMF to improve its efforts doing so.We will continue
to work with the IMF to streamline the policy conditions for its lending and
to focus its lending strategy on achieving economic growth through sound fiscal
and monetary policy, exchange rate policy, and financial sector policy.
The concept of "free trade" arose as a moral principle even before it became
a pillar of economics. If you can make something that others value, you should
be able to sell it to them. If others make something that you value, you should
be able to buy it. This is real freedom, the freedom for a personor a
nationto make a living. To promote free trade, the Unites States has
developed a comprehensive strategy:
- Seize the global initiative. The new global trade negotiations we
helped launch at Doha in November 2001 will have an ambitious agenda, especially
in agriculture, manufacturing, and services, targeted for completion in 2005.
The United States has led the way in completing the accession of China and
a democratic Taiwan to the World Trade Organization.We will assist Russias
preparations to join the WTO.
- Press regional initiatives. The United States and other democracies
in the Western Hemisphere have agreed to create the Free Trade Area of the
Americas, targeted for completion in 2005. This year the United States will
advocate market-access negotiations with its partners, targeted on agriculture,
industrial goods, services, investment, and government procurement.We will
also offer more opportunity to the poorest continent, Africa, starting with
full use of the preferences allowed in the African Growth and Opportunity
Act, and leading to free trade.
- Move ahead with bilateral free trade agreements. Building on the
free trade agreement with Jordan enacted in 2001, the Administration will
work this year to complete free trade agreements with Chile and Singapore.
Our aim is to achieve free trade agreements with a mix of developed and developing
countries in all regions of the world. Initially, Central America, Southern
Africa, Morocco, and Australia will be our principal focal points.
- Renew the executive-congressional partnership. Every administrations
trade strategy depends on a productive partnership with Congress. After a
gap of 8 years, the Administration reestablished majority support in the
Congress for trade liberalization by passing Trade Promotion Authority and
the other market opening measures for developing countries in the Trade Act
of 2002. This Administration will work with Congress to enact new bilateral,
regional, and global trade agreements that will be concluded under the recently
passed Trade Promotion Authority.
- Promote the connection between trade and development. Trade policies
can help developing countries strengthen property rights, competition, the
rule of law, investment, the spread of knowledge, open societies, the efficient
allocation of resources, and regional integrationall leading to growth,
opportunity, and confidence in developing countries. The United States is
implementing The Africa Growth and Opportunity Act to provide market-access
for nearly all goods produced in the 35 countries of sub- Saharan Africa.We
will make more use of this act and its equivalent for the Caribbean Basin
and continue to work with multilateral and regional institutions to help
poorer countries take advantage of these opportunities. Beyond market access,
the most important area where trade intersects with poverty is in public
health.We will ensure that the WTO intellectual property rules are flexible
enough to allow developing nations to gain access to critical medicines for
extraordinary dangers like HIV/AIDS, tuberculosis, and malaria.
- Enforce trade agreements and laws against unfair practices. Commerce
depends on the rule of law; international trade depends on enforceable agreements.
Our top priorities are to resolve ongoing disputes with the European Union,
Canada, and Mexico and to make a global effort to address new technology,
science, and health regulations that needlessly impede farm exports and improved
agriculture. Laws against unfair trade practices are often abused, but the
international community must be able to address genuine concerns about government
subsidies and dumping. International industrial espionage which undermines
fair competition must be detected and deterred.
- Help domestic industries and workers adjust. There is a sound statutory
framework for these transitional safeguards which we have used in the agricultural
sector and which we are using this year to help the American steel industry.
The benefits of free trade depend upon the enforcement of fair trading practices.
These safeguards help ensure that the benefits of free trade do not come
at the expense of American workers. Trade adjustment assistance will help
workers adapt to the change and dynamism of open markets.
- Protect the environment and workers. The United States must foster
economic growth in ways that will provide a better life along with widening
prosperity.We will incorporate labor and environmental concerns into U.S.
trade negotiations, creating a healthy network between multilateral
environmental agreements with the WTO, and use the International Labor Organization,
trade preference programs, and trade talks to improve working conditions
in conjunction with freer trade.
- Enhance energy security. We will strengthen our own energy security
and the shared prosperity of the global economy by working with our allies,
trading partners, and energy producers to expand the sources and types of
global energy supplied, especially in the Western Hemisphere, Africa, Central
Asia, and the Caspian region.We will also continue to work with our partners
to develop cleaner and more energy efficient technologies.
Economic growth should be accompanied by global efforts to stabilize greenhouse
gas concentrations associated with this growth, containing them at a level
that prevents dangerous human interference with the global climate. Our overall
objective is to reduce Americas greenhouse gas emissions relative to
the size of our economy, cutting such emissions per unit of economic activity
by 18 percent over the next 10 years, by the year 2012. Our strategies for
attaining this goal will be to:
- remain committed to the basic U.N. Framework Convention for international
- obtain agreements with key industries to cut emissions of some of the most
potent greenhouse gases and give transferable credits to companies that can
show real cuts;
- develop improved standards for measuring and registering emission reductions;
- promote renewable energy production and clean coal technology, as well
as nuclear powerwhich produces no greenhouse gas emissions, while also
improving fuel economy for U.S. cars and trucks;
- increase spending on research and new conservation technologies, to a total
of $4.5 billionthe largest sum being spent on climate change by any
country in the world and a $700 million increase over last years budget;
- assist developing countries, especially the major greenhouse gas emitters
such as China and India, so that they will have the tools and resources to
join this effort and be able to grow along a cleaner and better path.
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