Bill Clinton on Free Trade and Financial Deregulation (1993-2000)
During his time in office, Bill Clinton passed the North American Free Trade Act (NAFTA) in 1993, allowing for the free movement of goods between Mexico, the United States, and Canada, signed legislation repealing the Glass-Steagall Act, a major plank of Franklin Roosevelt’s New Deal banking regulation, and deregulated the trading of derivatives, including credit default swaps, a complicated financial instrument that would play a key role in the 2007-2008 economic crash. In the following signing statements, Clinton offers his support of free trade and deregulation.
On the North American Free Trade Act (NAFTA) (1993)
In a few moments, I will sign the North American Free Trade Act into law. NAFTA will tear down trade barriers between our three nations. It will create the world’s largest trade zone and create 200,000 jobs in this country by 1995 alone. The environmental and labor side agreements negotiated by our administration will make this agreement a force for social progress as well as economic growth. Already the confidence we’ve displayed by ratifying NAFTA has begun to bear fruit. We are now making real progress toward a worldwide trade agreement so significant that it could make the material gains of NAFTA for our country look small by comparison.
Today we have the chance to do what our parents did before us. We have the opportunity to remake the world. For this new era, our national security we now know will be determined as much by our ability to pull down foreign trade barriers as by our ability to breach distant ramparts. Once again, we are leading. And in so doing, we are rediscovering a fundamental truth about ourselves: When we lead, we build security, we build prosperity for our own people.
Make no mistake, the global economy with all of its promise and perils is now the central fact of life for hard-working Americans. It has enriched the lives of millions of Americans. But for too many those same winds of change have worn away at the basis of their security. For two decades, most people have worked harder for less. Seemingly secure jobs have been lost. And while America once again is the most productive nation on Earth, this productivity itself holds the seeds of further insecurity. After all, productivity means the same people can produce more or, very often, that fewer people can produce more. This is the world we face.
We cannot stop global change. We cannot repeal the international economic competition that is everywhere. We can only harness the energy to our benefit. Now we must recognize that the only way for a wealthy nation to grow richer is to export, to simply find new customers for the products and services it makes. That, my fellow Americans, is the decision the Congress made when they voted to ratify NAFTA.
And now I am pleased that we have the opportunity to secure the biggest breakthrough of all. Negotiators from 112 nations are seeking to conclude negotiations on a new round of the General Agreement on Tariffs and Trade; a historic worldwide trade pact, one that would spur a global economic boon, is now within our grasp. Let me be clear. We cannot, nor should we, settle for a bad GATT agreement. But we will not flag in our efforts to secure a good one in these closing days. We are prepared to make our contributions to the success of this negotiation, but we insist that other nations do their part as well. We must not squander this opportunity. I call on all the nations of the world to seize this moment and close the deal on a strong GATT agreement within the next week.
I say to everyone, even to our negotiators: Don’t rest. Don’t sleep. Close the deal….
Today, as I sign the North American Free Trade Agreement into law and call for further progress on GATT, I believe we have found our footing. And I ask all of you to be steady, to recognize that there is no turning back from the world of today and tomorrow. We must face the challenges, embrace them with confidence, deal with the problems honestly and openly, and make this world work for all of us. America is where it should be, in the lead, setting the pace, showing the confidence that all of us need to face tomorrow. We are ready to compete, and we can win.
On the Gramm-Leach-Bliley Act (1999)
Today I am pleased to sign into law S. 900, the Gramm-Leach-Bliley Act. This historic legislation will modernize our financial services laws, stimulating greater innovation and competition in the financial services industry. America’s consumers, our communities, and the economy will reap the benefits of this Act.
Beginning with the introduction of an Administration-sponsored bill in 1997, my Administration has worked vigorously to produce financial services legislation that would not only spur greater competition, but also protect the rights of consumers and guarantee that expanded financial services firms would meet the needs of America’s underserved communities. Passage of this legislation by an overwhelming, bipartisan majority of the Congress suggests that we have met that goal.
The Gramm-Leach-Bliley Act makes the most important legislative changes to the structure of the U.S. financial system since the 1930s. Financial services firms will be authorized to conduct a wide range of financial activities, allowing them freedom to innovate in the new economy. The Act repeals provisions of the Glass-Steagall Act that, since the Great Depression, have restricted affiliations between banks and securities firms. It also amends the Bank Holding Company Act to remove restrictions on affiliations between banks and insurance companies. It grants banks significant new authority to conduct most newly authorized activities through financial subsidiaries.
Removal of barriers to competition will enhance the stability of our financial services system. Financial services firms will be able to diversify their product offerings and thus their sources of revenue. They will also be better equipped to compete in global financial markets.
The Gramm-Leach-Bliley Act is a major achievement that will benefit American consumers, communities, and businesses of all sizes. I thank all of those individuals who played a role in the development and passage of this historic legislation.
On the Commodity Futures Modernization Act (2000)
The Administration strongly supports the version of H.R. 4541, the Commodity Futures Modernization Act of 2000, that the Administration understands will be considered on the House floor. This legislation would reauthorize the Commodity Futures Trading Commission (CFTC) and modernize the Nation’s legal and regulatory framework regarding over-the-counter (OTC) derivatives transactions and markets. In so doing, H.R. 4541 also would implement many of the unanimous recommendations regarding the treatment of OTC derivatives made by the President’s Working Group on Financial Markets, which includes the Secretary of the Treasury and the Chairmen of the Federal Reserve Board of Governors, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.
It is important that this legislation be enacted this year because of the meaningful steps it would take in helping to: promote innovation; enhance the transparency and efficiency of derivative markets; maintain the competitiveness of U.S. businesses and markets; and, potentially, reduce systemic risk. H.R. 4541 would accomplish these goals while assuring adequate customer protection for small investors and protecting the integrity of the underlying securities and futures markets. A failure to modernize the Nation’s framework for OTC derivatives during this legislative session would deprive American markets and businesses of these important benefits and could result in the movement of these markets to overseas locations with more updated regulatory regimes. The Administration looks forward to working with members of Congress to improve certain aspects of the bill as it continues through the legislative process.
[Source: William J. Clinton, “Remarks on Signing the North American Free Trade Agreement Implementation Act,” December 8, 1993. Available online via The American Presidency Project (http://www.presidency.ucsb.edu/ws/?pid=46216); Source: William J. Clinton, “Statement on Signing the Gramm-Leach-Bliley Act,” November 12, 1999. Available online via The American Presidency Project (http://www.presidency.ucsb.edu/ws/?pid=56922); Source: William J. Clinton, “Statement of Administration Policy: H.R. 4541 – Commodity Futures Modernization Act of 2000,” October 19, 2000. Available online via The American Presidency Project (http://www.presidency.ucsb.edu/ws/?pid=74825).]