5. Message to the Congress Transmitting President Nixon’s First Annual International Economic Report1
To the Congress of the United States:
The Nation is again at peace. We also are firmly on the course of strong economic growth at home. Now we must turn more of our attention to the urgent problems we face in our economic dealings with other nations. International problems may seem to some of us to be far away, but they have a very direct impact on the jobs, the incomes and the living standards of our people. Neither the peace we have achieved nor the economic growth essential to our national welfare will last if we leave such matters unattended, for they can diminish our prosperity at home and at the same time provoke harmful friction abroad.
Our major difficulties stem from relying too long upon outdated economic arrangements and institutions despite the rapid changes which have taken place in the world. Many countries we helped to rebuild after World War II are now our strong economic competitors. Americans can no longer act as if these historic developments had not taken place. We must do a better job of preparing ourselves—both in the private sector and in the Government—to compete more effectively in world markets, so that expanding trade can bring greater benefits to our people.
In the summer of 1971, this Administration initiated fundamental changes in American foreign economic policy.2 We have also introduced proposals for the reform of the international monetary and trading systems which have lost their ability to deal with current problems. The turmoil in world monetary affairs has demonstrated clearly that greater urgency must now be attached to constructive reform.[Page 16]
At home, we have continued our fight to maintain price stability and to improve our productivity—objectives which are as important to our international economic position as to our domestic welfare.
What is our next step?
In my State of the Union message on the economy last month, I outlined certain measures to strengthen both our domestic and international economic position. One of the most important is trade reform.3
In choosing an international trade policy which will benefit all Americans, I have concluded that we must face up to more intense long-term competition in the world’s markets rather than shrink from it. Those who would have us turn inward, hiding behind a shield of import restrictions of indefinite duration, might achieve short-term gains and benefit certain groups, but they would exact a high cost from the economy as a whole. Those costs would be borne by all of us in the form of higher prices and lower real income. Only in response to unfair competition, or the closing of markets abroad to our goods, or to provide time for adjustment, would such restrictive measures be called for.
My approach is based both on my strong faith in the ability of Americans to compete, and on my confidence that all nations will recognize their own vital interest in lowering economic barriers and applying fairer and more effective trading rules.
The fact that most of these comments are addressed to the role of our Government should not divert attention from the vital role which private economic activity will play in resolving our current problems. The cooperation and the initiative of all sectors of our economy are needed to increase our productivity and to keep our prices competitive. This is essential to our international trading position. Yet there are certain necessary steps which only the Government can take, given the worldwide scope of trading activity and the need for broad international agreement to expand trade fairly and effectively. I am determined that we shall take those steps.
I know that the American people and their representatives in the Congress can be counted on to rise to the challenge of the changing world economy. Together we must do what is needed to further the prosperity of our country, and of the world in which we live.
- Source: Public Papers: Nixon, 1973, pp. 219–220. Nixon’s message and the first annual report of the Council on International Economic Policy were printed in a 94-page booklet entitled “International Economic Report of the President, Transmitted to the Congress March 1973.” Nixon had underscored the necessity for international monetary reform in his January 31 economic report to Congress: “Nowhere is the need to make 1973 a year of economic reform more apparent than in our international relations.” (Ibid., p. 51) The administration’s Trade Reform bill, submitted to Congress on April 10, subsequently provided a framework for further cooperation and engagement between the United States and other global powers in the world trading system. For the text of the message transmitting the bill to Congress, see ibid., pp. 258–270. See also Foreign Relations, 1969–1976, volume XXXI, Foreign Economic Policy, 1973–1976, Document 169.↩
- A reference to the administration’s August 1971 New Economic Policy, which removed the United States from the gold standard. See ibid., volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 168.↩
- Breaking with tradition, Nixon delivered six shorter State of the Union messages to Congress during February and March 1973: an overview and five messages focusing upon natural resources and the environment, human resources, community development, law enforcement and drug abuse prevention, and the economy. While primarily domestic in theme and scope, the economic message contained several references to improving American relationships with its global trading partners. See Public Papers: Nixon, 1973, pp. 117–124.↩