Remarks at the Annual Meeting of the United States Chamber of Commerce

Thank you very, very much, John. And what do you think about that Marine Corps Band, led by Colonel Bourgeois? Aren't they first class? Thank you, ladies and gentlemen, very much. And it's always a pleasure to meet with this high-powered group. I want to pay my respects once again to Dick Lesher, the president of the chamber; to salute your outgoing chairman, John Clendenin, for the leadership that he's shown and the sacrifice that he's given over the past year; and then to salute your incoming chairman, James Baker. Not a Cabinet shakeup -- [laughter] -- I'm talking about James K. Baker, who will carry the chamber's fine tradition forward into this new decade.

And finally, let me welcome our special guests: all these Washington-area schoolchildren, right here in front. I know that you all have been looking forward to today for a long time. And after all, it's not every day that you get out of math and spelling. [Laughter] And I know it won't be easy to understand all the things we're talking about this morning, but there's one thing that I'm sure you can understand: You're here because you're important, because when you grow up you might just run your own business, like the people here. Or maybe you'll even run for President of the United States. It may be hard to believe, but I was once a second-grader just like you are now. [Laughter] So, today I want to challenge all of you to keep working hard in school. Do your very best, and don't be afraid to reach for your dreams.

And I want to challenge the Chamber of Commerce as well -- that's all the rest of you who are past the second grade out there. [Laughter] All of you know that the Governors and I have agreed on a set of national education goals, goals we must meet by the year 2000, the year these second-graders here graduate. And I'm delighted at all the Chamber of Commerce is doing to advance this great cause of excellence in education, but today I challenge you to get involved in every school and community across America. Help us make that classroom a place where miracles happen.

And before I go any further, I want to thank the chamber for its support on an issue essential to our nation's economic future. Last week I sent to the Congress a three-point plan for budget reform: one, supporting the Legislative Line-Item Veto Act; two, proposing an amendment to the Constitution to provide a Presidential line-item veto; and three, a balanced budget amendment. The chamber, together with other organizations in the Coalition for Fiscal Responsibility, has been out there on the front lines of the battle for budget reform; and I ask you now to push hard for this three-point plan. The time has come to put our fiscal house in order.

And let me say a few words about my administration's trade strategy. First, success in the Uruguay round trade talks is my top trade priority. The GATT needs strengthening. It doesn't cover services, investment, or intellectual property rights. Its rules on agricultural trade are far too weak, creating counterproductive pressures to subsidize farm exports. And we've got to strengthen GATT as a matter of principle: as a sign to the emerging democracies in Eastern Europe and in this hemisphere that free trade is the way of the future.

Second, let me just say a word about Japan. All of you know that I did not name Japan a priority country under the Super 301 provisions of the 1988 Trade Act. That does not mean that all of our problems with Japan have disappeared. We know that we could sell more American products if Japan's market were truly open. But we've been working hard on that and, I think, with impressive results. Over the past few months, we've made more progress on trade issues with Japan than at any other time I can recall. And part of the reason for this success, if you will, is that the Prime Minister, Prime Minister Kaifu of Japan, shares our commitment to ensuring that trade strengthens rather than undermines the friendship between our nations. Now, we are going to continue to press for progress. And keep in mind, section 301 and other trade law authorities remain available to the President, and we will use all the tools at our disposal to open markets and ensure fair treatment for American products, services, American investments and ideas. I'm confident in Carla Hills, our very able and tenacious Trade Representative. I'm confident in her ability, and I'm confident we will achieve lasting results.

John Clendenin mentioned in his speech the whirlwind of the changes we've seen this past year. And last year I spoke to you on May 1, May Day, by tradition one of the great days of celebration in the Socialist world. I said then that even the Socialist world was coming to see that socialism wasn't just another economic system: it was the death of economics. And that much was clear. What none of us could have seen on the eve of May Day 1989 was how close we had come to the wholesale collapse of communism.

First in Poland, then across Eastern Europe -- one nation after another broke the stranglehold of the state and embraced democracy. And here in our own hemisphere, in Panama and Nicaragua, the day of the dictator gave way to the decade of democracy. These transforming events brought freedom to tens of millions of people, and with that freedom, new challenges -- digging out from under the wreckage of ruined economies, reclaiming rights and freedoms long denied. Everywhere from Prague to Panama City, the time has come to make a start in the difficult work of democracy building.

It's that challenge that I want to talk to you about today, and it's a challenge that can engage every single one of you because you and the institutions you represent are proof of the power of the private sector. Democracy prospers when it rests on the firm foundation of the free market. Think about that. What it means is that one of the chief aims of our public policy must be to involve the private sector, in all its diversity, in the business of building democracy.

That's not to say that there's no work for government to do. Government-to-government aid is essential, especially in the first days of democracy when the institutions of free government are most fragile. That's why we put together aid packages for Poland and Hungary, and that's why I continue to urge Congress to move our Nicaragua and Panama emergency aid legislation to final passage as soon as possible. It is embarrassing. Today I meet with President Endara of Panama. I've asked the Senate and the House to move on that legislation over a month ago, and they haven't done it. I call on them again today to take action in the Senate so we can help those fledgling democracies in Panama and Nicaragua.

It is frustrating to see the Congress delaying its work. Here's the facts. On this legislation, I called for aid on March 13th, to be exact, and asked that it be passed by April 5th. In the House, $800 million in domestic discretionary spending was added. The Senate added another half a billion dollars and, in committee, tacked on a contentious abortion provision. No wonder the American people get so frustrated with the way the Congress operates. Nicaragua and Panama quite simply need this aid. We've got to deliver, and we've got to show that when democracy is at stake America always extends a helping hand.

But as I've said many times, government aid alone is simply not the answer. It's more than a matter of finding enough funds: it's a matter of principle, of what we mean when we talk about building democracy. The simple truth is this: Democracy and the freedoms it enshrines can never be a gift of government.

Earlier this year, in the State of the Union, I talked about the cornerstones of free society, the building blocks of democracy, all these elements that make America what it is: competition, opportunity, stewardship, private investment. Those building blocks are what make America work. More than that, they're what makes democracy work. They're what the newly emerging democracies of this hemisphere and in Eastern Europe need to grow and prosper.

Think back to what Lech Walesa said last November when he spoke to the AFL - CIO. Picture it -- Solidarity labor leader speaking before our great AFL - CIO about the needs of the new Poland. Here is the quote: "Such is the fate of a Polish trade unionist," he said, "that he has to launch a publicity campaign for private entrepreneurship."

Lech Walesa told the Congress that he hadn't come to ask for charity -- as we know that we can't create democracy by writing a check. We build democracy in other nations not by taking responsibility for their needs but by helping them take responsibility for themselves. We build democracy whenever we help individuals take their destiny into their own hands. Democracy puts the focus not on government but on the freedom of the individual, not on the state but on society, the private sector. Democracy thrives in direct proportion to the flowering of individual freedom and free enterprise.

Our administration is doing all it can to promote private sector development. The Commerce Department, under Bob Mosbacher's able leadership, has opened its Eastern Europe Business Information Center and, with the chamber, has hosted a conference on doing business in Eastern Europe. Carla Hills, our able Ambassador, and her USTR team have been negotiating with the emerging democracies to open the way for expanded trade. At Labor, we've got a great Secretary of Labor -- Elizabeth Dole. She's directing programs assisting Poland on key issues such as job training and unemployment insurance. At Agriculture, most of you know Secretary Clayton Yeutter. He's doing a fine job. He's led this effort, our effort, to provide food aid and free market expertise to spearhead agricultural reform.

Today I want to turn the spotlight on one of the best-kept secrets in town -- an agency called OPIC, the Overseas Private Investment Corporation. OPIC's programs have been around since the days of the Marshall plan, providing loans and risk insurance to American companies expanding into markets across the developing world. Here's a fact I know this crowd in particular will appreciate: OPIC is one government agency that actually turns a profit. Today especially, OPIC is an important tool in our overall approach to help the world's emerging democracies sustain themselves.

But we've got to be realistic. Economic growth won't come overnight. Eastern Europe sustained four decades of economic decay, and here in our own hemisphere, years of dictatorship in Nicaragua drove its economy right into the ground, destroyed the basic commercial infrastructure that makes growth possible. But with the emergence of democracy, these nations are working around the clock to jump-start their stalled economies, to make the fundamental changes needed to create a functioning free market. For democracy's sake, we've got to do all we can to help this transition take place.

Let me tell you what OPIC then is doing to strengthen the free market foundations of democracy in Panama. Just 60 days after Operation Just Cause, OPIC led an investment mission of 27 American businesspeople to meet with their counterparts in Panama. The investment agreements that came out of that 7-day mission should lead to the direct investment of more than $70 million in Panama and 400 new jobs.

Now, here's the story of one company that took part in that OPIC mission -- Servrite International, a small dairy company based in New Haven, Connecticut. Servrite had plans to invest in Panama, plans that it abandoned because of the old regime. Now, with the return of democracy, Servrite is moving forward, building a modern milk processing plant in the rural province of Chiriqui. The project will create 50 new jobs and provide technical assistance to help 30 Panamanian dairy farmers get their milk to market. For Servrite, this is a good business opportunity, but for the Panamanians involved, it's more than just a paycheck: it's a chance to build a future.

We're looking then to create the same kind of opportunity for investment in Nicaragua and, of course, beyond our own hemisphere, in Eastern Europe. As we speak, OPIC's President, my good friend Fred Zeder, a successful businessman in his own right, is leading a mission to Hungary and Poland, playing matchmaker to 43 American corporations and a far larger number of Eastern Europe's aspiring entrepreneurs.

Most of you know about the $150-million deal between G.E., General Electric, and Hungary's largest electric enterprise, Tungsram. What you may not know is OPIC's leading role in making that investment possible. That's just a fraction of the interest generated so far. Already OPIC has received requests representing more than $2 billion worth of American investment in Hungary and Poland alone, for the potential for growth and the dividend for democracy are both great.

You may have heard about some of Japan's new joint ventures in Eastern Europe -- Suzuki's plan to build cars in Hungary or Daihatsu's deal to do the same in Poland. There's nothing unfair about these ventures, just proof that one of our key competitors is engaged in a hardnosed hunt for good opportunities in a new market. And I've said it before, and I'll say it now: American business can outthink, outwork, outperform any nation in the world. But we can't beat the competition if we don't get in the ball game. And if American business wants to keep ahead of the competition, the time to act is now.

Government must act, too, to help energize the private sector, and today I'm announcing a new initiative under OPIC's auspices to establish an Eastern European growth fund, a magnet for the kind of investment capital that can create self-sustaining growth and responsible development. This fund will be privately managed, underwritten in part by OPIC, and backed by its political risk insurance within existing budget authorities. And when fully capitalized at $200 million, this fund will provide a significant source of new capital for promising economic ventures.

I know the chamber is already involved in expanding free market forces. I've heard about your newly created Eastern European Trade and Technical Assistance Center and about the new American Chamber of Commerce in Budapest. You are helping millions of people realize their dream of democracy.

It will be a tremendous struggle, measured not in days or months but years. But what I've seen on my visits to Poland and Hungary and what I've learned in my conversations with the new leaders of Nicaragua and Panama is that all the years of despotic rule have not crushed the human spirit. These people are determined, full of hope and dreams, and now they're free. And if our American example teaches anything, it teaches that freedom is the world's most powerful force.

It's been a great privilege to speak to all of you today. Thank you, and may God bless these little kids, and may God bless the United States of America. Thank you all very, very much.