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Richard Nixon on Free Trade
President of the U.S., 1968-1974
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China's MFN trade status key to US Pushing positive change
If we remain in China, we can play a critical role in helping the private economy gradually eclipse the state sector. In this respect, the most counterproductive thing we could do would be to revoke China's most-favored-nation trade status. A revocation
of MFN status would devastate Hong Kong, a conduit for over 70% of China's exports. If we want to have an impact on the changes occurring in China, we should not pull the plug on trade. Increasing economic progress will bring progress on human rights.
Source: Seize the Moment, by Richard Nixon, p.174-177
, Jan 15, 1992
Push Japan on trade, but no retaliatory protectionism
The US-Japanese relationship can only be saved if both sides make concessions. We should reverse the trend toward retaliatory protectionism because trade barriers always backfire by triggering ever-escalating countermeasures.
Broad-based trade retaliation leads to economic isolation. We should pursue carrot-and-stick policies vis-a-vis Japan in coordination with our European allies at the GATT talks and at the annual economic summits.
Only as a last resort should we employ selective retaliation if the Japanese refuse to abandon clear and identifiable unfair trade practices.Meanwhile, Japan must reduce its tariff and nontariff trade barriers.
We should insist on structural reforms in the Japanese economic system that will eliminate monopolistic and anticompetitive practices of individual firms and cartels. If the Japanese want access to our markets, we must have access to theirs.
Source: Seize the Moment, by Richard Nixon, p.160-161
, Jan 15, 1992
Tariffs are just another entitlement that saps incentive
We hear claims that by virtue of living in the US, a person is "entitled" not only to subsistence amounts of food, clothing, and health care, but to more and more of the amenities of life as well. It is not just the poor who seek these entitlements.
Farmers who demand a guaranteed price for their crops, steelmakers who demand tariffs to protect their market share, and dozens of other special interests all seek a guaranteed place at the federal trough.
People are entitled to an opportunity to earn the good things in life. They are not entitled to receive them from the earnings of others. It is up to them to ensure that what they bring to the market equals in value what they want to get out of it.
It saps incentive, builds resentment, and leads eventually to a corrosive sense of alienation and failure among those who are lured by its siren song into thinking that the nation owes them the good life without effort on their part.
Source: Seize the Moment, by Richard Nixon, p.290
, Jan 15, 1992
1985: Reduce Japan's non-tariff barriers
As Japan became the dominant regional economic power and global economic superpower, its leaders became more confident and more assertive.Prime Minister Yasuhiro Nakasone exemplified this trend.
When I met with him in 1985, we discussed the need to reverse the trend toward protectionism in the US and to reduce the non-tariff barriers discriminating against foreign goods in Japan.
Unlike most previous Japanese prime ministers, Nakasone was looking beyond bilateral issues to Japan's role on the world stage.
He conceded that Japan needed to spend more on defense, though he stressed this would have to be done in ways that would not alarm neighboring countries.
Source: In The Arena, by Richard Nixon, p. 57
, Apr 1, 1991
Competition with Japan but no economic warfare
Spirited economic competition between the US and Japan is one thing. But it must not be permitted to degenerate into economic warfare. Enhancing the shared responsibility of the US and Japan to cooperate in protecting and extending peace, freedom,
and prosperity in Asia and the developing world will go a long way toward reducing the nationalist recriminations that politicians in both the US and Japan hurl across the Pacific from time to time.
Source: In The Arena, by Richard Nixon, p. 59
, Nov 30, 1978
Page last updated: Apr 28, 2013
