pd07fe00 Videotape Address to the People of Puerto Rico on Efforts To Resolve the...

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suspicion in the developing world when they are uttered by people from 
the developed world. I understand that these words are code for ``rich-
country protectionism.''
    So let me be as clear as possible on this. We shouldn't do anything 
to stunt the economic growth and development of any developing nation. I 
have never asked any developing nation, and never will, to give up a 
more prosperous future. But in today's world, developing countries can 
achieve growth without making some of the mistakes most developed 
countries made on worker protection and the environment as we were on 
our path to industrialization. Why is that? Why can they get richer 
without doing the same things we did? And since, when countries get 
richer, they lift labor standards and clean up the environment, why do 
we care? I think there are two answers to that.
    First, the reason they can do it is that the new economy has 
produced scientific and technological advances that absolutely disprove 
the old ideas about growth. It is actually now possible to grow an 
economy faster, for example, with a sensible environmental policy and by 
keeping your kids in school instead of at work, so that you build more 
brainpower to have more rapid, more long-term, more balanced growth.
    Secondly, we all have an interest, particularly in the environmental 
issue, because of global warming, because of greenhouse gas emissions, 
and because it takes somewhere

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between 50 and 100 years for those emissions to go away out of our 
larger atmosphere. So if there is a way for us to find a path of 
development that improves, rather than aggravates, the difficulties we 
have with climate change today by reducing rather than increasing 
greenhouse gases, we are all obligated to do it.
    That is why, after the Kyoto Protocols, I recommended to all the 
advanced nations that we engage in emissions trading and vigorous 
investment of new technologies in developing countries, with an absolute 
commitment to them that we would not ask them to slow their economic 
growth.
    We will see within the next few years automobiles on the streets all 
over the world that routinely get somewhere between 70 and 90 miles a 
gallon. In South America, many countries run on ethanol instead of 
gasoline. The big problem is that the conversion is not very good; it 
takes about 7 gallons of gasoline to make 8 gallons of ethanol. Within a 
matter of a couple of years, scientists almost certainly will unlock the 
chemical block that will enable us to produce 8 gallons of fuel from 
farm products or grasses or even farm waste like rice hulls, for 1 
gallon of gasoline. When that happens, you will see people driving cars 
that effectively are getting 400 or 500 miles to the gallon of gasoline.
    These things are before us. All these technologies should be 
disseminated as widely as possible, as quickly as possible, so that no 
nation gives up any growth to be a responsible environmental partner in 
the world.
    And on the human development side, I will say again, the globalized 
economy prizes human development above all else. It is in the long-term 
and the short-term interests of developing countries not to abuse their 
workers and to keep their children in school.
    Now, do we have all the answers to this? No, partly because the 
circumstances and the possibility, even for trade engagement, from 
nation to nation vary so much; but partly because we don't have more 
forums like this within which we can seek common understandings on 
worker rights, the environment, and other contentious issues.
    We have suggested that the Committee on Trade and the Environment be 
invited to examine the environmental applications of WTO negotiations in 
sessions where developing countries form the majority. We cannot improve 
cooperation and mutual understanding unless we talk about it. That is 
our motivation; that is our only motivation in seeking to open a 
discussion about the connections between labor and trade and 
development, in the form of a new WTO working group.
    And I will say this again, the consequence of running away from an 
open dialog on a profoundly important issue will be--it won't be more 
trade; it'll be more protection. The consequence of opening up a dialog 
and dealing honestly with these issues will show that in the new 
economy, we can have more growth and more trade, with better treatment 
for people in the workplace and more sensible environmental policies. I 
believe that. You have to decide if you believe that.
    My experience in life--and I'm not as young as I used to be--let me 
just say, at Thanksgiving a 6-year-old daughter of a friend of mine 
asked me how old I was. She looked up at me and she said, ``How old are 
you, anyway?'' And I said, ``I'm 53.'' She said, ``That's a lot.'' 
[Laughter]
    Well, it looks younger every day to me. But I have lived long enough 
to know this: In the words of that slogan that people my daughter's age 
always use, denial is not just a river in Egypt. [Laughter] And the more 
we hunker down and refuse to devote time systematically to discussing 
these issues and letting people express their honest opinion, the more 
we are going to fuel the fires of protectionism, not put them out. We 
have to make some institutional accommodation to the fact that this is a 
part of the debate surrounding globalization.
    Now, I feel the same way about labor standards. And there is a win-
win situation here. Let me just give you one example. We had a pilot 
program through our Agency for International Development, working with 
the garment industry in Bangladesh to take children out of factories and 
put them back in schools. The program got kids to learn, and actually 
boosted garment exports and gave jobs to adults who would otherwise not 
have had them.
    We can do more of this if we lower the rhetoric and focus more on 
results. Common

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ground means asking workers in developed countries to think about the 
future of workers in Asia, Africa, or Latin America. It means 
governments finding the courage to rise above short-term political 
interest. It means corporations taking responsibility for the effects of 
their actions, whether they're in an African delta or a New York 
highrise. It means a new, more active idea of corporate responsibility, 
stepping up to the plate to pay for vaccines or educate a new generation 
of workers in another country as a part of the globalization economic 
strategy.
    Finally, let me say that the lessons from our history are clear: we 
will--we must support the rules-based system we have, the WTO, even as 
we seek to reform and strengthen it.
    I think those who heard a wakeup call on the streets of Seattle got 
the right message. But those who say that we should freeze or disband 
the WTO are dead wrong. Since World War II, there have been eight 
separate rounds of multilateral trade negotiations, hundreds of trade 
agreements signed. What's happened? Global trade has increased 
fifteenfold, contributing to the most rapid, sustained, and, yes, widely 
shared growth ever recorded.
    There is no substitute for the confidence and credibility the WTO 
lends to the process of expanding trade based on rules. There's no 
substitute for the temporary relief WTO offers national economies, 
especially against unfair trade and abrupt surges in imports. And there 
is no substitute for WTO's authority in resolving disputes, which 
commands the respect of all member nations. If we expect public support 
for the WTO, though--I'll get back to my main point--we've got to get 
out of denial of what's happening now.
    If we expect the public to support the WTO the way I do--and I think 
almost all of you do--we have to let the public see what we're doing. We 
have to make more documents available, faster; we have to open dispute 
panel hearings to the public; we have to allow organizations and 
individuals to panel their views in a formal way; and we all have to 
play by the rules and abide by the WTO decisions, whether we win or 
whether we lose.
    Let me be clear. I do not agree with those who say we should halt 
the work of the WTO or postpone a new trade round. But I do not agree 
with those who view with contempt the new forces seeking to be heard in 
the global dialog. Globalization is empowering people with information, 
everywhere.
    One of the most interesting things I did on my trip to China was 
visit an Internet cafe. The more people know, the more opinions they're 
going to have; the more democracy spreads--and keep in mind, more than 
half the world now lives under governments of their own choosing--the 
more people are going to believe that they should be the masters of 
their own fate. They will not be denied access. Trade can no longer be 
the private province of politicians, CEO's, and trade experts. It is too 
much a part of the fabric of global interdependence.
    I think we have to keep working to strengthen the WTO--to make sure 
that the international trade rules are as modern as the market itself; 
to enable commerce to flourish in all sectors of the economy, from 
agriculture to the Internet. I will keep working for a consensus for a 
new round--to promote development, to expand opportunity, and to boost 
living standards all around the world. We will show flexibility, and I 
ask our trading partners to do the same.
    But I would like to just close by trying to put this dilemma that 
you've all been discussing, and that was writ large in the streets of 
Seattle, in some context. Now, keep in mind, arguably a lot of the 
demonstrators in Seattle have conflicting objectives themselves, because 
of the interests that they represented. The thing they had in common 
was, they felt that they had no voice in a world that is changing very 
rapidly. So I want to make two observations in closing.
    Number one, we should stop denying that there is in many places an 
increase in inequality, and we should instead start explaining why it 
has happened and what we can do about it. Every time a national economy 
has seen a major change in paradigm, in the beginning of the new economy 
those that are well-positioned reap great gains; those that are uprooted 
but not well-positioned tend to suffer an increase in inequality.

[[Page 193]]

    In the United States, when our economy, the center of our economy 
moved from farm to factory 100 years ago--and many people left the farm 
and came to live in our cities; and many people from your countries came 
to our shores and were living in unbelievably cramped conditions in 
tenement houses in New York City and elsewhere, working long hours, 
breathing dirty air--there was a big increase in inequality, even though 
there was an increase in wealth, in the beginning. Why? Because some 
people were well-positioned to take advantage of the new economy, and 
some people weren't.
    But then political and social organizations began to develop the 
institutions which would intermediate these inequalities. And the 
economy itself began to mature and disperse the benefits more broadly, 
and inequality went down. When we saw, beginning about 20 years ago in 
most advanced economies, a shift from the industrial economy to the 
digital economy, in many places there was an increase in inequality. In 
our country, we had a 25-year increase in inequality, which seems to 
have halted and been reversed only in the last 2 to 3 years.
    So a part of this is the change in the paradigm of the global 
economy which puts a huge, huge, huge premium on education, skills, and 
access to information technology, which is even more burdensome to 
developing economies seeking to come to grips with these challenges.
    Now, having said that, it should be obvious to all that the last 
thing in the world we want to do is to make the global economy less 
integrated, because that will only slow the transition to the digital 
economy in the poorest countries or in the poorest neighborhoods of the 
wealthy countries.
    The answer is to look at what happened in the transition from the 
agricultural economy to the industrial economy, develop a 21st century 
version of that, and get it done much, much faster--not to run to the 
past but not to deny the present.
    The second point I'd like to make is this. We have a well-developed 
WTO for dealing with the trade issues. We don't have very well-developed 
institutions for dealing with the social issues, the environmental 
issues, the labor issues, and no forum within which they can all be 
integrated. That's why people are in the streets; they don't have any 
place to come in and say, ``Okay, here's what I think and here's the 
contribution I have; here's the beef I have. How are we going to work 
all this out?''
    That's why you're all here talking about it. That's why you've got a 
record crowd here. And we all know this intuitively. So I think if I 
could offer any advice, there are--there's thousands of times more 
experience and knowledge about all these things in this room than I have 
in my head. But I do understand a little bit about human nature and a 
little bit about the emerging process of freedom and democracy. We have 
got to find ways for these matters to be dealt with that the people who 
care about them believe are legitimate. And we cannot pretend that 
globalization is just about economics and it's over here, and all these 
other things are very nice, and we will be very happy to see somebody 
over here somewhere talk about them.
    You don't live your life that way. You don't wake up in the morning 
and sort of put all these barriers in your head and--you know, it's all 
integrated. It's like I say, we've got the Chairman of the Palestinian 
Authority here; we're working very hard to find a comprehensive peace in 
the Middle East. We can't find that peace if we say, ``Well, here's what 
we're going to do on these difficult issues and, oh, by the way, there's 
economics, but it's over here and it doesn't have anything to do with 
it.'' We have to put all these things together.
    So I ask you, help us to find a way, first, to explain to the 
skeptics and the opponents of what we believe in, why there is some 
increase in inequality as a result of an economic change that is 
basically wonderful and has the potential--if we make the changes we 
should--to open possibilities for poor people all over the world that 
would have been undreamed of even 10 years ago. And second, find a way 
to let the dissenters have their say, and turn them into constructive 
partners. If you do that, we will continue to integrate the world 
economically and in terms of political cooperation.
    We have got a chance to build a 21st century world that walks away, 
not only from the modern horrors of terrorists and bio- and

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chemical terrorism and technology but away from ancient racial, 
religious, and tribal hatred. Growth is at the center of that chance. It 
gives people hope every day. But the economics must be blended with the 
other legitimate human concerns. We can do it--not by going back to the 
past but by going together into the future.
    Thank you very much.
    President Klaus Schwab. Mr. President, ladies and gentlemen, we have 
just time for one or two questions. But before raising these issues, Mr. 
President, I can tell you, and the applause has shown you, what support 
you have for your plea for an open, rules-based trading system and for 
globalization. But at the same time, what we take home and what suddenly 
will influence our discussions very much over the next days, I think we 
have--and we are all aware here in this hall--that we have to change our 
attitudes, and that we have to create this human and social dimension to 
globalization. It's in our own interest, and your speech, I think, will 
be reminded and will be translated into the necessary action.
    Now, Mr. President, just two questions. The first one: In your 
reference to free trade and the WTO, you didn't mention China. And my 
question is----
    President Clinton. Yes, I did.
    President Schwab. You mentioned it?
    President Clinton. I did, but I don't have--I speak with an accent, 
so--[laughter]
    President Schwab. No, no. [Laughter]
    President Clinton. I did, but I----
    President Schwab. The question which I would like to raise is, will 
you actually rally the support in your country and internationally to 
get China integrated into the WTO?
    President Clinton. I think so. In the United States, in the 
Congress, there are basically two blocks of people who oppose China's 
accession to the WTO. There are those who believe we should not do it 
because even though--everyone has to recognize, if you look at our trade 
deficit with China, everyone recognizes it's huge--by far, the biggest 
part of our trade deficit. Everyone recognizes that we have kept our 
markets open to China, and that if we had greater access to Chinese 
markets, it would be a good thing for us. So no one could seriously 
argue that the openings from agriculture and for other opportunities are 
massive, and that it would mean more to the United States than any other 
country since we buy--we're about 22 percent of the world's economy, and 
every year we buy between 33 and 40 percent of all China's exports, and 
we have a major, major trade deficit.
    On the economic argument, the people who are against it say, ``Yes, 
that may be true, but if you put China in the WTO, it's basically a 
protectionist country and then America will never get any real action on 
labor and environmental standards and all that because China will thwart 
every reform we want.'' That's what people say.
    Then, there is another group of people that don't want to vote for 
it because of the actions the Chinese have taken to try to preserve 
stability at the expense of freedom. They believe that even if China's 
economy has grown more open, political crackdowns, crackdowns against 
the Falun Gong and others have gotten more intense, more open, and that 
it puts the lie to the argument that integrating China into the 
international system will lead to a more open, more democratic, more 
cooperative China. Those are basically the two arguments that will be 
made.
    Those both rate serious issues, but I think it would be a mistake of 
monumental proportion for the United States not to support China's entry 
into the WTO. I believe that because, again, my experience is that 
you're almost 100 percent of the time better off having an old adversary 
that might be a friend working with you, even when you have more 
disagreements and you have to stay up a little later at night to reach 
agreement, than being out there wondering, on the outside wondering what 

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