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1997 Speeches

Phil Condit

The Boeing Company

"Trade: A Vision for the Future"

National Press Club

Washington, D.C.

September 25, 1997

Thank you, Mr. Sammon. And thank you for inviting me to this distinguished gathering of National Press Club members and guests.

When I heard that Charlton Heston spoke here two weeks ago, and Placido Domingo comes soon, I wasn't sure anyone would show up to hear a suit and tie guy like me talk about trade. I'm glad you proved me wrong. Let me make it clear: I can't do Moses and I can't sing - at least like Placido... so I'll try to do what I do well... maybe make an offer to acquire the National Press Club.

What I would really like to do today is talk about my vision for world trade.

Life on our planet is swiftly changing, and this brings both opportunity and challenge. We can lead and succeed, or follow and fail. Knowing the right move, at the right time, is key in chess, in life, in business, in trade. I believe open trade is the key to our success in the upcoming global century. And now is the time!

I would like to offer two premises and then a conclusion:

First premise: Technology has and will increasingly link us together as a global community.

Second premise: Market economies work better than centrally planned economies.

The conclusion: If we can access these new, global, market economies, we will prosper.

Now let's look at each premise a little closer.

First: Technology has and will increasingly link us together as a global community.

Fifty years ago life was very different. No jet airplanes, space shuttles, overnight air express. No PCs, CDs, VCRs, ATMs. No cell phones, car phones, or pagers. No downloads, uploads, microwaves, or laptops. No credit cards, CNN, Big Macs, Starbucks, or Microsoft.

Going to Europe was a huge event in 1947. A once in a lifetime event. Now we jump on an airplane, are there in a few hours, and complain about the movie selection. Five decades ago, we wrote papers, reports, and stories using pen and paper. Now, we lug laptops halfway around the world, and try to find the right plug in the hotel room wall in Brazil, Japan, or India.

Fifty years ago, we shopped at the local department store for our "dry goods." Now we buy products by phone, catalog, aboard airplanes, and on the web. Once newspapers, radio and magazines were the source for all our news. Today our sources are almost unlimited.

We listen to Bernard Shaw report "live" from his hotel room in Baghdad as missiles zoom by his window. We go backpacking and wearing our Walkman listen to NPR in the forest. We "download" pictures of a tiny roving machine chugging around Mars inspecting rocks. And we visit the White House web site to read what happened at the daily news briefing with Mike McCurry. Amazing change.

As a company, Boeing, in 1996, we set a 20-year goal to be more geographically dispersed. A year later, with two mergers under our belt, we are operating in 27 different states. That 20-year goal realized. Rapid change.

And technological advances continue tying us together. It's certainly true for me. I can communicate directly to 85,000 of 225,000 Boeing people with a single keystroke. That number will soon be 150,000, and then 225,000 employees. What does that mean? A new organizational structure? More timely communication? I'm not sure. I do know it will radically change the way we do business on a global scale.

Movement of goods and transportation systems are changing too. Great cities of the world grew up because of access to transportation. Great cities were either on ocean ports, on major rivers, or on major trading routes. That is why New York, Hong Kong, and Singapore are "where they are." Cities are now beginning to grow up around air much like they did around water and rail in the past.

Think about Orlando. There air is key to moving the large numbers of people necessary to keep the tourist economy vital. I believe this trend will continue around the world, especially the Asia Pacific region with more and more cities linked by non-stop air service. Transportation will continue to bring us into a single community.

What does all this mean? We are no longer like we once were. We are no longer a local or national society. We are no longer 1947.

Technology has and will increasingly link us as a global economy.

Second Premise: Market economies work better than centrally planned economies.

We certainly have a great case study with the comparison between the world's largest planned economy, the Soviet Union, and the world's largest market economy, the United States. But it is instructive to think a little bit about why market economies work better than centrally planned economies. I think one major reason is the "freedom to innovate," and then let the market determine success or failure.

Imagine in a centrally planned economy...

What bureaucrat would have hired two bicycle makers, from Dayton, Ohio, to develop an airplane? Or for that matter Glen Martin, or Allan and Malcolm Lockheed, or James McDonnell, or Don Douglas, or Bill Boeing? And what bureaucrat would have taken the first steps in the aerospace industry I now represent?

What bureaucrat would have paid two Stanford kids - Bill Hewlett and Dave Packard - to start an electronics company in their garage and help create the Information Age?

What bureaucrat would have picked a Harvard dropout, Bill Gates, to develop software used in every corner of the globe?

The answer: No one. The data tells us that bureaucracies aren't good at innovating. Individuals are.

Market economies have raised the quality and standards of life for us all. Governments didn't decide which VCR system, VHS or Beta, would win. Markets did. Governments didn't decide personal computer diskettes would be 3-1/2 inches. Markets did. The list is endless. As we look around the world, we see a trend toward more open markets and less government intervention.

Centrally planned economies really don't work.

Now I do believe market economies need to operate in a rules-based international system.

Government doesn't do well on the innovation side of the market. But government has a critical role in the future of trade. Government provides the structure for us to work within...the rules that guide us in our actions in the marketplace. And these rules ensure that companies have a fair shot at selling our products overseas.

As global competition intensifies, we will be more interdependent as companies, countries, people, and products. And I believe this provides an opportunity for the United States to lead.

The bottom line:

Market economies work better than centrally planned economies.

Now, the conclusion. If we can access these new, global, market economies, we will prosper.

I believe the global, market economy offers us a chance of a lifetime. This is not a time for our nation to be shy. It is a time to lead the world.

We need leadership strategies to support worldwide market economies and a rules-based trading system. Economies beyond our borders are growing and reaching new levels of maturity. China, Russia, Chile, Brazil, India, Indonesia, for example. China participates in international trade. But doesn't yet belong to the trading system that writes the international rules, the World Trade Organization. So today, it doesn't have to follow the same rules as we do. China, however, has embraced the goal of achieving a market economy and open trade. President Jiang Zemin of China declared just days ago that China will privatize most state industries to move toward a market economy. As China moves to accelerate the pace of trade, it is embracing an equally dramatic program of economic reform.

In the months ahead, we have a chance to lock in these reforms to ensure that China moves even further down the road toward a market economy, open trade, and the rules-based systems which are also key to advancing American values.

We can do that by bringing China into the World Trade Organization on commercially meaningful terms and, ultimately, granting China permanent Most-Favored-Nation trade status.

So we need leadership strategies to engage China and all countries to move toward a rules-based trading system.

If we continue to debate and wait, the progress made on trade to date will be jeopardized. In a world that is changing swiftly, the ability to respond quickly is even more critical to leading. And that is why we support extending the President's fast-track trade negotiating authority. If we don't lead, help the people of our country understand what is at risk, we will fall behind and end up standing on the sidelines. Watching as others move into the main stream of international trade.

Trade is not about a few big multinational companies.

Trade affects almost everyone. People in middle America. People who work at Charles Engineering in Kansas. This 13-year-old company sells all its products to companies in the United States. One is The Boeing Company. Chosen as our Small Business Supplier of the Year, this company employs 17 people who roll-form aluminum parts for our commercial aircraft.

Since we export 70 percent of all our commercial airplanes outside our country, each of our suppliers, indirectly are exporters. Last year alone, we spent more than $20 billion with 58,000 suppliers in 50 states buying a wide range of parts, equipment, and services from companies across our country.

They are part of our nation's invisible exporters, who serve Boeing customers in 143 countries. And this is why it's so important for Congress to continue to fund the Ex-Im Bank. The Ex-Im Bank is not just about helping large American corporations compete, it benefits thousands of small businesses, our invisible exporters.

The effects of trade don't stop there. Boeing people bank, buy cars, clothes, and homes. Pump gas, drink colas and lattes, and grab groceries on the go. Rent videos, visit zoos, attend plays, and local sports events. They golf, bowl, river raft. Eat take-out. Buy newspapers. Since 70 percent of each Boeing commercial airplane person's paycheck derives from exports, trade touches all of us in one way or another.

Debate rages today about who benefits from trade. Some argue that only big corporations and top management are the beneficiaries. I disagree. There is no doubt in my mind that trade has enriched the lives of millions of people.

Trade shouldn't be a free-for-all. There must be rules. Internationally recognized rules. And rules that are applied to all. We have come a long way since 1947 when 23 countries met in Geneva, to sign the General Agreement on Tariffs and Trade, but we still have a long way to go. I believe we ought to be the world leaders on trade: to work together more and recognize that the world is on fast forward.

People, places, and products are changing by leaps and bounds due to rapid advances and the convergence of technology, transportation, and communications. And it's not going to stop!

Now let me wrap this up.

Fifty years ago next month, the leaders from those 23 countries signed the GATT. No jet airplanes took them to Geneva. No PCs, cell phones, or CNN impacted a last minute revision. No computer generated the text agreement. No Xerox machine printed extra copies. No e-mail messages home. Yet these countries, and their leaders, did have one thing: vision.

They had vision to be leaders. Their good forethought and leadership "about trade" secured a solid and strong future for people of those 23 countries, who have a better standard of living today.

I believe leading is about:

Leading is about being out in front of others..."pulling," making it attractive for others to go "where you are going." You can't lead and push at the same time. Debating whether it's...MFN, or non-MFN, bilateral or multilateral, sanctions or non-sanctions, fast-track or no fast-track, are not leadership strategies. They are not pull; they're push. Not strategic, but tactical.

I believe we, too, can have a similar vision by recognizing that trade is a key to our future. Trade is powerful. It drives positive reform around our planet. It improves living standards. It creates new wealth and leads to more opportunity and prosperity.

I am convinced that:

Technology has and will increasingly link us together as a global community.

I am convinced that:

Market economies work better than centrally planned economies.

And I think that means:

If we can access these new, global, market economies, we will prosper.

The key is to lead, and I believe the United States can provide that leadership.

Now I'd be happy to take your questions.