Radio Address to the Nation on International Trade and the Deficit

My fellow Americans:

It's been a busy week here in Washington with the issue of international trade on the front burner. Legislation that would erect a new trade barrier was voted on by the House of Representatives, and here at the White House, I discussed trade issues at length with Prime Minister Nakasone of Japan, one of America's most important trading partners. These developments are important to all of us, because one of the gravest threats to economic expansion and American jobs is protectionist legislation that sets up trade barriers and higher tariffs.

By sparking retaliation from foreign governments, this approach ultimately ignites a trade war, shuts down foreign markets, and stymies economic growth at home. Unfortunately, the House of Representatives decided to go down that track, but there's a positive twist to the vote. You see, in an encouraging bipartisan showing, a good many Democrats joined with Republicans in opposition to an especially bad amendment. This week's vote in the House indicates we have a strong hand in keeping bad proposals like this from gaining final passage in Congress. Believe me, I would like to sign sound trade legislation, but I will not sign bills that close down markets and shut off expanded job opportunities.

Now, with regard to my discussions on the trade issue with Prime Minister Nakasone, the news was more positive. I've already stressed that we're against protectionism and in favor of free trade, but there's another side to this: Free trade is also fair trade, and that means not permitting other nations to take advantage of our trade policies by erecting barriers of their own. Now, I recently ordered increased duties on certain Japanese products coming into this country in response to Japan's inability to enforce our agreement on semiconductor trade.

This action and our entire trading relationship with Japan was one of the issues Prime Minister Nakasone and I discussed at length. We are of one mind about avoiding protectionist steps on either side of the Pacific. I made it clear that I hope our ongoing review of data related to the semiconductor agreement will provide evidence of compliance and allow us to remove the recently imposed restrictions on Japanese products as soon as possible. The Prime Minister reiterated his own government's commitment to honoring our trade agreements and working together for free trade in the Pacific and throughout the world. Prime Minister Nakasone also agreed to measures to stimulate the Japanese economy, which should increase demand for U.S. products in Japan.

Let me turn now to another issue on the docket this week, one that's related to trade: the budget and excessive spending. Our trade deficit reflects the fact that this nation is spending more than its income, and a key to solving this problem is to get deficit spending by the Federal Government under control. Two years ago we took a major step in this direction when the Congress agreed to a bill called Gramm-Rudman-Hollings that gradually reduces deficit spending and eventually leads to a balanced budget.

But unlike the trade issue, the developments this week on this front were not encouraging. The Senate, for example, adopted certain procedures that make it far easier to exceed the Gramm-Rudman-Hollings spending targets, targets they agreed to just 17 months ago. Maybe your reaction is the same as mine: Here we go again. Congress just keeps passing higher and higher spending bills, all the time ignoring its promises to the American people under Gramm-Rudman-Hollings: a promise to stop enacting a hodgepodge of excessive spending bills and come up instead with a comprehensive budget that keeps deficit spending under control.

As I've been saying right along, the problem is the congressional budget process itself. Congress just refuses to exercise any budget discipline. That's why it's essential that the President be given the power to step in and cut out the waste. I need what the Governors of 43 States use to—used, I should say, to accomplish this: the line-item veto, a way of reaching into these massive congressional spending bills and cutting out the wasteful items. And, of course, Congress is also showing that we really need a Constitutional amendment that would mandate a balanced budget. If Congress can't discipline itself, then the American people must say no. Believe me, the events of this week show again how important both these initiatives are.

So, that's the news on this week. Let me just take a moment now to look forward to next week and another important issue on our domestic agenda: illegal drug use. We'll be announcing a White House Conference for a Drug Free America. It's going to give us a chance to look at the progress we've already made in this crusade and then map out a plan for the future, and that's good news!

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