Interview With Foreign Journalists

Tokyo Economic Summit

Q. Well, maybe I can start, Mr. President. You're going to Tokyo at a time when there's been some signs of division and strain in the Western alliance, I think over Libya and, certainly, over trade and other foreign policy issues. And I was wondering if you see that there will be a need at Tokyo to make some sort of fence-mending with your European allies to keep the alliance in good shape.

The President. Well, I'm confident—after having gone to several of these summits and having now a long, relatively long relationship with the people involved, I am not concerned that we have any serious differences between us or anything that we can't work out. That's really the purpose of the summits, is to see that we meet regularly and are able to talk out any problems that arise. And I don't think the differences between us are all that great. So, I'm optimistic that when we get there we're going to talk about, as we have before, the things that we believe can be mutually beneficial-better understandings. I know that some of the things that'll be discussed is the need for another GATT [General Agreement on Tariffs and Trade] round of talks to see how we can improve that tariff arrangement. And I think very definitely we will be talking about terrorism and how we can, cooperatively, work closer together to rid the world of this menace, this plague.

Libya and Terrorism

Q. Mr. President, are you going to press the allies for further sanctions against Libya? Also, you didn't follow very strictly through with your own oil companies.

The President. I think that what we're going to do is take the subject of terrorism and all that we all know about it—we have made great progress with regard to our sharing of intelligence information, and that resulted last year in the aborting worldwide of 126 known, planned terrorist actions. And so, I think we're going to start with what can we find that we can all agree upon as a means of dealing with this problem. If I understand you correctly with regard to the oil situation—were you speaking about the need of the European countries for Libyan oil or were you speaking about the American-owned companies -

Q. The American oil companies still in Libya.

The President. Yes, there is a problem there that I've seen some critics now in the media saying, "How can this go forward?" What would the alternative be? The alternative would simply be that Qadhafi would confiscate them, and then he'd be better off than he is now. He'd own the whole thing instead of simply getting a royalty from oil being produced there.

Q. Mr. President, the Prime Minister of Italy, Mr. Bettino Craxi, disagreed with the American bombing on Tripoli. But at the same time he condemned the Libyan state-sponsored terrorism. Craxi said, "We need a cease-fire in the Mediterranean Sea. Otherwise, the situation gets out of control." What do you think about this statement?

The President. Well, I agree. And I've noticed—if he's been quoted correctly—I'll be looking forward to talking to him there about this. He has made it plain that if Italy is the victim of such terrorism, Italy will respond. So, we seem to have something in common there.

South East Asian Nations

Q. Mr. President, we Japanese people are very, very honored and we look forward to welcoming you and other leaders to Tokyo for the summit. But actually, we are very much interested in your visiting Indonesia and meeting the ASEAN [Association of South East Asian Nations] leaders before coming to Tokyo. And we feel that it's going to be somewhat of a historic summit in the sense that you and Mr. Nakasone had talked about this summit quite recently. And Mr. Nakasone has said that he and you share the view that you two work together to send the message of bright future for the 21st century in the coming summit.

Could you share some of your views or some of these messages to us?

The President. Yes, I do, and will, because he and I have discussed this, and it is true. I think that the new frontier, the next frontier in the world is the Pacific Basin. And having been a Governor of a State that for 1,500 miles borders on that Pacific, I have long been interested in the development there. And now the ASEAN nations are, as far as our country is concerned, our Fifth greatest trading partner. And they have made more gains in development than any of us. They're coming along faster in their economic growth than any other part of the world. So, I think it's most important that all of us should be looking there for how we can cooperate with them and be of help in their further development and so forth.

Q. Mr. President, for France, as you know, there would be President Mitterrand and the Prime Minister, Jacques Chirac. Will you consider the Prime Minister as an equal, as someone you can talk with, or will you just as before—the other summit—will you talk and speak with and negotiate with Mr. Mitterrand?

The President. I think that that is something to be decided by the French Government, that the manner in which they come and how they have arranged their own place in government will be accepted by the rest of us; and certainly we will cooperate with however they have chosen to do this. If it is separately or together or however, that is, we'll respect France's right to determine that.

Canada-U.S. Free Trade Agreement

Q. Mr. President, I think you expect me to talk about free trade today with this in front of the Senate Foreign Relations Committee. It looked this morning as though the Canada-U.S. free trade agreement was going to be defeated. And it's been postponed, I gather, until tomorrow morning, but still chancy. Some of us think this is historic, an example for the world in terms of trade and liberalizing trade. But I think many people have the impression that the White House has not been very—it's not been a high priority for the White House. So, I'd like to ask, you know, how important is it to you? What are you willing to do, and what if this is defeated tomorrow?

The President. It is extremely important, and we have been—I have been on that telephone a great deal. You know our governmental situation and our legislature and all. And I'll be very frank with you and tell you that I am concerned that the possibility-well, that some of the negative votes are not aimed at Canada but are based on certain political differences here within our own country and our government. And I have been urging and will continue to do everything I can. This delay of the vote was a part of our struggle to see if we can't be successful. But do everything I can to see that we work this out, because here we are—we are the greatest trading partners of each other in the world. And I think that this is all-important and that we should continue this and go forward with these negotiations that the Prime Minister and I have talked of. And I regret very much that there are some in-house differences that are threatening this arrangement.

Libya and Terrorism

Q. Could I go back to Libya again, Mr. President? Your spokesman this morning

The President. Be careful when you go there. [Laughter]

Q. I don't mean physically. Maybe you can give me a ride. [Laughter] Your spokesman this morning said that—I think in your name—that the United States welcomed the action that the Europeans took yesterday in restricting Libyan diplomats further

The President. Yes.

Q.—but that more was needed. And I was wondering what sort of "more" that meant? Does it mean economic sanctions still? Is that the sort of thing you're going to ask in Tokyo?

The President. Again, as I say, I hate to dwell on one thing or another. We know that this is going to be discussed, and I want to see what we can all come together on. But there's no question about the seriousness of this, and there's no question about serious, open dedication to the use of terrorism. As a matter of fact, they have called it a war. And, granted, that they have aimed the war, according to Qadhafi's words, more specifically at us. But right now—and one of the things that we knew before we took our action against them was that we have definite information on at least 35 planned terrorist actions. And they are particularly aimed at Americans, but they take place in all of the other countries. And, therefore, the violence is not going to be confined to just a target.

For example, we know that in France the expulsion of those Libyan diplomats was because we knew of an action that had been planned and even the weapons distributed. And what that was going to mean was that when people—the only place where America was the target was the locale—our Embassy. But outside the Embassy where the people line up to come in to get visas-now, those won't be Americans, they don't need visas to come to America; so those would be citizens of France and other countries that would be there. And that action was simply to mow down with grenades and small arms fire these people—men, women, and children that would be lined up there seeking visas. So, there isn't any one of us that is free from the threat. In the Rome and Vienna airport slaughters, which I think Mr. Qadhafi called a "noble deed," well, there was only a minority of Americans there. They happened to be in front of American Airline ticket offices, but—or ticket counters, but these were people of several other countries.

So, it is an international problem. And I think that we can continue the cooperation we've had and enlarge upon it and bring this to an end.

European Economic Recovery

Q. Mr. President, concerning economic policy, the main issue of the Tokyo summit should be, perhaps—the German economy grew faster than the American last year and is expected to be the fastest growing among the big industrial countries this year. So, do you have still any complaints about German economic policy?

The President. No. We're delighted to see this. We're pleased about our currencies coming more into line with each other. I think it is fair to say, and true to say, that in the economic recovery, which all of us were suffering—or the economic decline, we seemed to take off first, and we were the first in bringing about the recovery and the expansion that we've had. But you really can't be prosperous unless all your trading partners are, too. And so, we're delighted to see now that the recovery has spread around to the other nations in the world and to our other trading partners. And I think it's all to the good. We're delighted.

Q. May I follow up, sir?

Q. Yes, go ahead.

Q. Would you like to see the deutsche mark and other European currencies arising still further in comparison to the dollar, because you just told us they are now coming in line?

The President. Yes. And if it is done as the result .

Q. Yes—so, yes, you would like the rise

The President. Yes, if it is done as just the result of the economic growth and the recovery of the economies of the other countries.

Q. So, you're expecting the deutsche mark rising further because the German economy is

The President. I don't think anyone can predict where it will come to, but I know the same thing has happened with the yen in comparison to our dollar. It, I believe, now is at the highest point it has ever been. But this makes for better trade for all of us.

International Terrorism

Q. Mr. President, again on terrorism, Italy is, as you know, on the frontline in the Mediterranean. This morning in the New York Times, in the column, someone said that the Italian Government, before the strike on Tripoli, was saying, and Mr. Craxi was saying, strike harder; we can't say it publicly, but do it. That is true or not?

The President. Well, I don't think I should be commenting on what someone might have said confidentially or not. But we're good friends. And, as I say, I think that we probably will find in Tokyo that we all are in more agreement than some of the impressions that have been given.

International Debts

Q. Mr. President, we have produced a huge problem, the so-called Japan Problem, in a form of nearly $50 billion current account surplus, balance-of-payment surplus. And maybe there are some disagreements even among the Western allies—I mean, between the United States and Europe about the efficacy of the policy, new policy which is now being propagated by Mr. Nakasone and his Cabinet. And what would you expect the Tokyo summit—deal with this huge current balance-of-payment surplus problem, so-called Japan problem?

And on the other hand, you see, there is another huge problem in the form of the accumulating deficit—or rather debts in the Third World countries. So, I would rather, you know, expect, or I would even hope, that you, Mr. President, have some nice sort of "Reagan Plan" up your sleeve— [laughter] —to solve these sort of things—[inaudible].—

The President. I think we're all better off if we go forward with helping the lesser developed nations, and they're the debtor nations now. But the manner in which they should be able to pay their debts is to have, again, an increase in their economy and have them become more self-sustaining, self-sufficient. And I think that your Prime Minister and I are agreed on the need for the nations like those in the summit to help—and not help just in the old way of hand-outs but to help them develop their economies so they can be more self-sufficient. And I think we're very much agreed on that. Now, the other part of your question, if I understood correctly, were you talking about the plan for Japan to become more an importing nation?

Q. And, also, in a form of the, you know, financial aid and something like that to the Third World countries who are suffering from the accumulating debts?

The President. Well, Japan has been in the forefront as a nation in, say, such help. And I think all our nations have tried to do this. And to the other problem about more of an importing nation, yes, I think this makes for, actually, better economics for your country as well to do this. Because as it is now, and probably as a result of some of your taxing policies, the incentive is more to saving than it is to consuming. Well, as the standard of living goes up and there is more consumption and more need to consume, then there's more industry both ways. And you have to remember that if that means Japan buying from outside and importing, but then that makes those they import from better able to buy in turn, and we all benefit.

International Trade

Q. Going on, Mr. President, on those trade matters, how do you see the trade talks with your European partners in Tokyo, with this trade war starting here in the States against European Community?

The President. No, no, wait a minute. I'm sorry, I.—

Q. On this trade issues, you know, U.S.A. has started, since 2 or 3 months now, a kind of war against EC countries on trade issue. And I really wonder how you can be really optimistic on the trade issue in the Tokyo summit with this background between European Community and U.S.A.

The President. Well, the thing that we believe in and were trying to sell worldwide is the need for free trade and open markets. And free trade must be fair trade. If you're trading with a trading partner who has protective tariffs or limits and quotas and so forth—that isn't free trade, because it isn't fair trade. And we had an experience-the world did, as a matter of fact, due to us. Back in the thirties, the 1930's, in the Great Depression—and some in our country here thought that a great protective tariff was the answer to our Depression. So, a thing called—for the two authors of it—the Smoot-Hawley tariff was put into effect. And it spread the Depression worldwide. And we never want to make that mistake again.

I'm opposed to protectionism. Now, it is true the European Community does practice some; for example, by Spain and Portugal's entry into the European Community. What happened there was under their rules. Their rules violate the GATT agreement, because those rules say that now Spain and Portugal must buy the agricultural products they have been buying from the United States, they must buy them from other members of the Community. Well, this is like taking $1 billion in trade away from our American farmers. And we feel there's got to be some compensation for this so that we can—and the best way would be for us to all review, and that's what we keep trying to do at the economic summit—to all review where we're restricting trade; at the same time that we want to sell, we don't want to buy.

And much of this—we've made a number of bilateral agreements, we're working bilaterally with Japan on this. But I think—I just—my own feeling is that every bit of economic history shows that free and open commerce is beneficial to all. And when you get in trying to adjust it and restrict it with various agreements, that's when you get in trouble, because protectionism is a two-way street.

You may say, well, like I vetoed a bill that our Congress passed. And it was a bill that would have had some protectionism here in our country for two or three different products. And they were trying to say that, "Well, this would mean more jobs in those industries for Americans." But nobody counts the jobs over here in the other industries that you lose when the other country retaliates. So, that's why I vetoed the bill; and they didn't override my veto. But this is what we need to talk about with the European Community, and we are going to be discussing with them.

Q. What do you hope to accomplish in Tokyo? And specifically, if you can't get a free trade agreement with Canada, how can you hope to have this kind of liberalization that you've just been talking about?

The President. Well, I'm not going to quit on one vote. We're going to keep trying for this.

Q. Would you?

The President. Yes. Oh, yes, of course. It's the right thing to do, and we'll keep after it. And I'll be pleased if you will quote me correctly on that to your people.

Q. Give it to me and I'll quote it.

The President. All right. No, I mean we're not going to give up on it.

British Prime Minister Thatcher

Q. Mr. President, by supporting you on the attack on Libya, Mrs. Thatcher has got herself into quite a lot of domestic political problems. In fact, one of the opposition has accused her of turning the British bulldog into a Reagan poodle. And I was wondering what you would have to say to her if you can help her in any way on that in Tokyo-for example, by discussing the future, possible use of American bases in Britain?

The President. Oh, yes, you bet I'll be discussing it. But you know something? I have to tell you that I have never known of a time when the English bulldog is safer than it is with Margaret Thatcher where she is. And she is not allowing anyone-anything in England to become an American poodle. I remember one of your countrymen said something and I have come to agree with it above all, and that was on my last trip there, when he very enthusiastically hit his fist in his hand and said to me, "Margaret Thatcher is the greatest man in England." [Laughter] I don't mean that to offend the ladies. I think he was trying to be complimentary. But, no, I have the greatest respect for her. And I'm sorry that her very courageous action caused her the problems that it did. But at the same time that she has my sympathy, she also has my conviction that she is well able to take care of herself and her country.

Middle East

Q. Mr. President, this morning's Wall Street Journal reported that you would like to encourage kind of a Marshall fund for the Middle East in Tokyo. Is that correct, and who should come up with the money in your opinion?

The President. Well, all of us. [Laughter] I don't know that we actually call it that, but in all the efforts to bring about peace in the Middle East, this idea that [Israeli] Prime Minister Peres broached to us of why don't we enlarge the circle. And why don't we bring in all the countries of the Middle East—all the moderate Arab States themselves—and look at the underlying problems there, economic and otherwise. And then say, wait a minute, instead of just sitting here in one room trying to bring a few countries together on a peace treaty, why don't we see how all together—and they and with whatever outside help is needed from all the rest of us in Europe and here in the Western World and Japan—how can we maybe bring about this same kind of thing we've been talking here about other parts of the world, of economic improvement, elimination of things that cause differences between various States, and enhancing the security of all, not just one or two. And I told our people—I said this—let us look at this and let us start talking to our friends and allies about what we can see together that might solve this. Because for too long a time the Middle East has been the touch-point that could set off world conflicts.

Q. Mr. President—

Mr. Speakes. We've got a group of Congressmen that are cooling their heels out in the lobby. I hate to cut some of you short, but I don't think we've got an alternative but to go ahead and get your Congressmen in here. I'm sorry.

The President. All right.

International Monetary Conference

Q. Mr. President, will you arrive—[inaudible]—conference on monetary question in Tokyo? You talked about them on the 4th of February.

The President. Will I talk about the

Q. In your statement of the 4th of February, you talk about a monetary conference, international conference.

The President. Oh. We asked our people to look at that. I still don't have the results of their studies to see whether this could happen—[inaudible].

Q. This is actually a follow up of my first question. What is your thinking about the Atlantic-Pacific Corporation?

Mr. Speakes. We'd better not do any more questions, because we're really going to get behind.