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National Security Strategy 2002

We will promote economic growth and economic freedom beyond America’s shores. All governments are responsible for creating their own economic policies and responding to their own economic challenges. We will use our economic engagement with other countries to underscore the benefits of policies that generate higher productivity and sustained economic growth, including:
• pro-growth legal and regulatory policies to encourage business investment, innovation, and entrepreneurial activity;
• tax policies—particularly lower marginal tax rates—that improve incentives for work and investment;
• rule of law and intolerance of corruption so that people are confident that they will be able to enjoy the fruits of their economic endeavors;
• strong financial systems that allow capital to be put to its most efficient use;
• sound fiscal policies to support business activity;
• investments in health and education that improve the well-being and skills of the labor force and population as a whole; and
• free trade that provides new avenues for growth and fosters the diffusion of technologies and ideas that increase productivity and opportunity. The lessons of history are clear: market economies, not command-and-control economies with the heavy hand of government, are the best way to promote prosperity and reduce poverty. Policies that further strengthen market incentives and market institutions are relevant for all economies—industrialized countries, emerging markets, and the developing world.
A return to strong economic growth in Europe and Japan is vital to U.S. national security interests. We want our allies to have strong economies for their own sake, for the sake of the global economy, and for the sake of global security. European efforts to remove structural barriers in their economies are particularly important in this regard, as are Japan’s efforts to end deflation and address the problems of non-performing loans in the Japanese banking system. We will continue to use our regular consultations with Japan and our European partners—including through the Group of Seven (G-7)—to discuss policies they are adopting to promote growth in their economies and support higher global economic growth.
Improving stability in emerging markets is also key to global economic growth. International flows of investment capital are needed to expand the productive potential of these economies. These flows allow emerging markets and developing countries to make the investments that raise living standards and reduce poverty. Our long-term objective should be a world in which all countries have investment-grade credit ratings that allow them access to international capital markets and to invest in their future.
We are committed to policies that will help emerging markets achieve access to larger capital flows at lower cost. To this end, we will continue to pursue reforms aimed at reducing uncertainty in financial markets. We will work actively with other countries, the International Monetary Fund (IMF), and the private sector to implement the G-7 Action Plan negotiated earlier this year for preventing financial crises and more effectively resolving them when they occur.
The best way to deal with financial crises is to prevent them from occurring, and we have encouraged the IMF to improve its efforts doing so. We will continue to work with the IMF to streamline the policy conditions for its lending and to focus its lending strategy on achieving economic growth through sound fiscal and
monetary policy, exchange rate policy, and financial sector policy.
The concept of “free trade” arose as a moral principle even before it became a pillar of economics. If you can make something that others value, you should be able to sell it to them. If others make something that you value, you should be able to buy it. This is real freedom, the freedom for a person—or a nation—to make a living. To promote free trade, the Unites States has developed a comprehensive strategy:
• Seize the global initiative. The new global trade negotiations we helped launch at Doha in November 2001 will have an ambitious agenda, especially in agriculture, manufacturing, and services, targeted for completion in 2005. The United States has led the way in completing the accession of China and a democratic Taiwan to the World Trade Organization. We will assist Russia’s preparations to join the WTO.
• Press regional initiatives. The United States and other democracies in the Western Hemisphere have agreed to create the Free Trade Area of the Americas, targeted for completion in 2005. This year the United States will advocate market-access negotiations with its partners, targeted on agriculture, industrial goods, services, investment, and government procurement. We will also offer more opportunity to the poorest continent, Africa, starting with full use of the preferences allowed in the African Growth and Opportunity Act, and leading to free trade.
• Move ahead with bilateral free trade agreements. Building on the free trade agreement with Jordan enacted in 2001, the Administration will work this year to complete free trade agreements with Chile and Singapore. Our aim is to achieve free trade agreements with a mix of developed and developing countries in all regions of the world. Initially, Central America, Southern Africa, Morocco, and Australia will be our principal focal points.
• Renew the executive-congressional partnership. Every administration’s trade strategy depends on a productive partnership with Congress. After a gap of 8 years, the Administration reestablished majority support in the Congress for trade liberalization by passing Trade Promotion Authority and the other market opening measures for developing countries in the Trade Act of 2002. This Administration will work with Congress to enact new bilateral, regional, and global trade agreements that will be concluded under the recently passed Trade Promotion Authority.
• Promote the connection between trade and development. Trade policies can help developing countries strengthen property rights, competition, the rule of law, investment, the spread of knowledge, open societies, the efficient allocation of resources, and regional integration—all leading to growth, opportunity, and confidence in developing countries. The United States is implementing The Africa Growth and Opportunity Act to provide market-access for nearly all goods produced in the 35 countries of sub-
Saharan Africa. We will make more use of this act and its equivalent for the Caribbean Basin and continue to work with multilateral and regional institutions to help poorer countries take advantage of these opportunities. Beyond market access, the most important area where trade intersects with poverty is in public health. We will ensure that the WTO intellectual property rules are flexible enough to allow developing nations to gain access to critical medicines for extraordinary dangers like HIV/AIDS, tuberculosis, and malaria.
• Enforce trade agreements and laws against unfair practices. Commerce depends on the rule of law; international trade depends on enforceable agreements. Our top priorities are to resolve ongoing disputes with the European Union, Canada, and Mexico and to make a global effort to address new technology, science, and health regulations that needlessly impede farm exports and improved agriculture. Laws against unfair trade practices are often abused, but the international community must be able to address genuine concerns about government subsidies and dumping. International industrial espionage which undermines fair competition must be detected and deterred.

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