 anything can get it from our taping. I guess you're on first, huh? Bob Hepburn with The Toronto Star from Canada. Mr. President, one of your major accomplishments many of your supporters say of your presidency has been the Canada-U.S. Free Trade Agreement, which is nearing completion. And Mr. Mulroney plans to talk about liberalized trade during the summit. Do you see this Free Trade Agreement as a first step towards closer economic ties between Canada and the U.S. in the future, maybe along the lines of the European Common Market or even your own North American Accord that you talked about? Well, I don't think that we've talked about or thought anything of that kind except that we both see that Free Trade Agreement as opening up probably one of the greatest free trade areas in the world as the future goes on. We are each other's biggest trading partners, Canada and the United States. And it just seems so practical to have this kind of a relationship. Now, if it leads to even closer relationships, that's just fine. We're pretty unique in the world. There aren't very many spots like the two of us in our relationship. Mr. President, I am Renzo Ciumfanelli of Corriere della Sera, Italy. In Moscow, where I was, I noticed that you sounded pretty confident about the West winning the economic Cold War. And Perestroika seems to admit that even in the U.S.S.R. the old-style Marxism-Leninism is a bit of a dead duck. Now, would you say that even Euro-communism now apparently in decline in France, in Italy and in Spain, although more liberal than the Soviet type, is becoming some kind of dead duck, too? Well, I don't know whether the duck is ready to die or not, but I think we have to recognize that there have been economic failures in the system as it has been attempting to work in the Soviet Union. And apparently some of them, including the General Secretary, feel the same way. I don't know whether they're willing to. In fact, I doubt that he is willing to say that the system itself must go, but he does recognize there must be changes if he is to improve the economy and eliminate some of the things that are making them, well, less able to compete worldwide in the world of trade. And of course, we as believers in free democracy, we have to agree with those changes. And we do believe firmly that our system, free trade, open trade between all peoples is the greatest answer. Mr. President, my name is François Sergent. I work for the French newspaper Libération. The French President François Mitterrand proposed last week to counsel all the public depths of the poorer African countries. And he wants to discuss this topic at the Toronto Summit. I would like to know what you think of this proposal and if the United States are ready to counsel also the outstanding public depths of the poorer countries, especially in Latin America. Well, the big debt problem in the world is divided. There are some more developed countries that presently and due to recent circumstances have big debts and their debts are owed to private concerns and private banks throughout the world. Then there were a group of countries, the very newly developing countries, their debts are owed to governments. I don't know all the specifics of President Mitterrand and what he was proposing, but I think all of us are agreed that we must do our best to be helpful with this problem with those countries. And whether it's forgiveness or whatever the approach might be, we must try to help them with that problem, but also then in helping them get into a position where they won't have need to borrow that way in the future, that they will be more self-supporting and developing in their economies. So I would look forward to such a discussion. Mr. President, my name is Ian Brody and I work for the Daily Telegraph of London. In your very moving Guildhall speech, you made several references to God and I wondered if, as your presidency winds down, you have become more reflective about God's influence on the direction of mankind and if you might even have formed a suspicion that Mr. Gorbachev, in his own way, might be a believer. No, I've never had an opportunity to discuss that with him or to know whether he is or not, although I do know from some biographical material that as a child or as a baby he was baptized, so at least he came from a family that believed. But this isn't something that's just recent with me. My mother was deeply religious and was probably the kindest human being I ever met. We were poor, but my mother was always finding someone that was in worse straits than we were and that we could help. And I'm grateful to her she has left me with a very deep and abiding faith. And I'll tell you, instead of giving a statement of my own, I'll quote Abraham Lincoln. He said when he was in this office, he said that if he did not feel he could call upon someone who was greater, stronger, and wiser than all others, he couldn't endure the job for 15 minutes. And then he added that he had been driven to his knees many times because there was no place else to go. Well, I feel that way too. Mr. President, I'm Carlos Wittmann of the Deutsche Zeitung Munich, West Germany. Mr. President, when you were in Moscow two weeks ago, you did not want to discuss the new Soviet proposal for radical troop reductions in Europe, partly probably because within the Alliance this had not yet been discussed. Meanwhile, West Germany has stated that the Soviet proposal would be, to our country, would be acceptable if it led first to the leveling out of asymmetries and of disparities between NATO and the Warsaw Pact. What is your opinion? Well, I think that also, as a matter of fact, when we negotiate with the Soviet Union, it is there are certain areas where it bilateral, but we recognize that we have to be there looking at the entire alliance as part of what we're representing. And I think all of us have come to the conclusion we haven't had an opportunity to exactly, I haven't to exactly discuss this, but I think that I'm speaking for all of us when I say that as we continue trying to achieve the START agreement, you know that what that treaty is. That before we embark on any other nuclear negotiations such as for tactical battlefield weapons, then first I think we must engage in conventional weapons reductions to bring them down to parity because right now some of the nuclear weapons only tend to even out the great disparity between the Soviet superiority in conventional weapons and that of the NATO alliance. So I would think that that is the next negotiation we undertake. Thank you. My name is Yoshio Murakami, the Asahi Shimbun of Japan. Mr. President, I would like to ask the so-called next or newly industrializing countries, specifically the Republic of Korea, Taiwan, Hong Kong and Singapore. As you coordinate economic trade, financial matters amongst the industrialized democracies, I presume the strong economies and trade supplicies of those next countries are bound to be considered in your discussion. What is your, how do you look upon the problems arising from those countries and areas newly industrializing and what is your approach? Well, I think what we have to do is what we have done with other trading partners and that is now that they are up and certainly able to be in a competitive position to make sure that none of us practice protectionism and that we observe the rules of free trade and maybe this will take bilateral arrangements first or do it by group and to bring them into the trading partnership of the world so that the playing field is even and that we all abide by the same customs and the same rules in our trade. And certainly some of those countries you were mentioning, South Korea and the Chinese on the island, they are robust trading partners. I think that they may be newly in that position but they are well able to take care of themselves and engage in free trade. Mr. President, Jim Gerstin's at the Los Angeles Times, I'd like to shift to the domestic arena and ask if you think that Speaker Wright's book deal might mute the political impact of the ethics questions in the presidential campaign and also just generally what your thoughts are on these reports now. You mean with regard to the speaker? Yes. Well, this is once again, I'm going to fall back to the same thing I've done when it's been with other people. I think it is proper that there is an investigation going forward with regard to these charges but I don't think that anyone should give an opinion until we know whether they are just accusations or whether they have really happened. Somebody saw my problem. I don't know what I've caught in my throat there. I just ask if you think there should be an independent council involved in this or if the House is the proper investigatory body. I have to wonder if it should not be the independent council from the standpoint of the relationship of the speaker to the majority of the committee and I think everyone would feel that it was more proper if it was done by an investigator outside an appointed investigator. Mr. President, this will be your eighth summit and for the first four, Mr. Trudeau from Canada was there and now the last four will be Mr. Mulroney. Many observers say that U.S.-Canada relations have improved dramatically since 1984 when Mr. Mulroney took office. Do you believe that's so and if so, why? Is it because you and Mr. Mulroney are closer personally, you're closer politically, you're both conservatives than you were with Mr. Trudeau? Maybe that has something to do with it but maybe there wasn't a real effort before on either side to improve the relationship but before I even knew Mr. Mulroney I came into this office believing that the United States should make every effort in the Western Hemisphere to bring us all the Western Hemisphere nations closer together. It didn't seem right to me that we had so much in common from Tierra del Fuego all the way to the North Pole that our boundaries should be meeting places and not dividing lines and I came in here pledged that I was naturally going to start with the countries closest to us on either side but also in my first year or so I made a trip down into Latin America and you know we've had many plans, past administrations, sending down plans to Latin America about how we should try to get along and so forth and I decided to go down there and ask them what ideas they had because the big colossus of the North we earned a reputation some years ago in our manner of handling things that led some of them to sort of draw back from us and this time I could see it when I would arrive in a country and sit down with the leaders and they were kind of waiting well here they go again and then I would say to them no I don't have a program I'd like to hear from you all I believe is that we should find ways to be better neighbors and when they got over their surprise then we had some friendly talks but we did start immediately with both Canada and our neighbor Mexico to establish a better relationship because as I say we all have that same pioneer heritage we all came from pretty much the same sources and why there are only three languages dividing us in the whole of North and South and Central America and religiously we worship the same God and so I just thought that we could be closer together and a greater force for good in the world if we were Mr. President in Moscow you observed that the famous definition of the Soviet Union as an evil empire is largely a thing of the past now would it be possible that by the same flexible approach maybe I don't know the American system based on private initiative no longer is enough to correct certain imbalances in other words would you say that if not socialism at least a degree of government management in the economy is necessary to correct certain imbalances Well in an earlier time there seemed to be a very definite Soviet plan of expansionism that the Marxian concept of a one world communist nation was still a part of the policy of the Soviet Union and therefore the infiltration tactics and so forth in their expansionism things were going on at that time such as the shooting down of the KL plane with so many people and all and of course the human rights factor also and their manner of treatment there and I do think that there has been a change and the whole matter of Glasnost and Perestroika if I read the book Perestroika myself to make sure that I think I don't say that they are aiming at complete elimination of this socialist framework but certainly they are aiming at things that are closer to what we believe in a greater freedom for the people an economy that is not hard and fast based on total government management we've seen that already this is what he's trying to accomplish so I think there is a much more legitimate reason for us to be seeing how many things we can agree on and how we can get along Could I follow that up? What about the American economy? Would you say that some kind of change of the formula is necessary when there are some imbalances in the U.S. economy? No, about our own economy I think that this country as it did from just pioneer wilderness I think we've proven the advantages of the free marketplace and maybe just by others comparing and seeing its success they'll want to find out what some of the secrets of the success are and they are mainly freedom this recovery that we're having right now and that has been going on now for some 68 months is an example of this we've created 16.8 million new jobs in just these some six years and the greater proportion of those jobs have not been created by the great industries with the thousands of employees they've been created by what we call entrepreneurs individuals who get an idea about starting a business and the bulk of those jobs have been created by businesses that employ less than 500 people Mr. President, there are a lot of talks about the burden sharing between the United States and the U.S. Do you think that the European countries Japan and Canada do sufficiently for their defense and for the defense of the Western world when you compare that to the American military efforts? I believe that basically they are and that there is a fair ratio there if you'll remember some time ago with regard to Japan it was felt by this country this was before I was president that we had limited them in their military after the war but then as time went on and it was very evident that we were friends and at peace with each other we suggested that they take over the defense of a certain of their area out to a certain distance which up until then we had been providing and they have done that and very successfully and so I do not agree with some people who are complaining all the time that we are carrying too big a load and not asking for the rest if you compare the spending and the comparisons of our gross national product and so forth I think we are doing very well Sir, what do you think will be the most important achievements that have come out of this economic summit in Toronto and what valedictory thoughts will you be leaving your fellow leaders this is your final economic summit? Well I don't know we will be discussing the same things that we always discuss and the things we have been making progress in and there are additional things that come along such as the question earlier about the poorer countries and so forth I know that we are going to be talking to them about joining in right now some help to two countries that very definitely needed one of them to first Afghanistan there are five million refugees returning to their country and probably their homes have been destroyed in the nine years of war so they literally come home with nothing and I think that this we will discuss about how we can all be of help there I know we have already determined that we are going to that would be one of the accomplishments that might be a little in addition to the usual things but we have been making great progress in our own trading practices to level the playing field as I have put it and eliminate protectionism we haven't totally succeeded and we have another great problem that first we dealt with in the Tokyo summit two years ago and then last year at Venice and we don't have the solution yet but that is aiming at a goal down the line say by the year 2000 a goal of the agricultural problem we came to the realization a couple of years ago that we together were subsidizing agriculture in the production of more farm goods than the market would buy in other words we created over reduction and maintained it through subsidies that amounted between us of about 200 billion dollars a year now we've already made some gains our subsidy program for the coming year is going to be several billion dollars less than it was for the last year but we still haven't resolved this problem and we must do it in a way that does not suddenly pull the rug out from under farmers in any of our countries and create hardships for them they too must join in this but we must find ways as I say to put farming back in the marketplace that its rules or what it does will be determined by the market and market need not by government handouts so that's one we look forward to and then I guess my valedictory as you call it would be simply an expression also a great pleasure that I've had and the great enjoyment of knowing them all in a way that we have become so close but also the things that we have together achieved and it's a farewell word to keep on in the same practice in the same relationship with whoever comes into this position next as to Mr. President Mitterrand is at the table and following his election Mr. President, was the swing to the right to conservatism in your eight years of office strong and deep enough to make it last or do you think that President Dukakis couldn't do it all within two or three years? I worry about that there are many things that have not been completely tied down on the other hand I do recall that in that first summit meeting which was in Canada that I attended and for the next go round or so I wasn't a very authoritative voice in the discussions but when our recovery, when we put in place our economic recovery program and it turned out to be so successful I arrived one day into my great joy they were sitting there to ask me how did I explain the American miracle and I hadn't heard that term before well I was happy to explain some of the things that we'd done and a number of the other countries have followed suit for example we reduced our income taxes now you would think that this we were running a deficit and in debt would be the wrong thing to do but I studied economics in school myself that's what my degree was in and I have been a believer all my life that tax reductions, reduction rates can very often produce more revenue and that's exactly what happened to us immediately after massively cutting down on the marginal rates of our income tax we found that almost instantly the government's revenues from those taxes increased because we had simply created an incentive in which people were now induced to earn more because they could keep more I was in an industry in which I knew what it was like to go the other way when there was a 90% top bracket in the income tax in the motion picture industry well any one of us who were in a starring position in pictures once you reached that level that you were in that tax bracket they could send you the best script in the world and you'd turn it down who's gonna go to work for ten cents on the dollar? Mr. President in your Helsinki speech along with other important points you made one of the points that drew attention in our part of the world was your reference to the northern islands those islands under dispute between Japan and the Soviet Union your Secretary of Defense Kaluchi briefed the Japanese authorities on his way back from Moscow that the issue was raised in Moscow my question is in what context did you raise the issue that you have not raised in the past previous three summits and in what context did you raise it and what was the Soviet response? Well let's say it was we did not get a definite answer of one kind or another on this but then that goes with these kind of negotiations you don't just the first time out get a yes or no answer on anything but that was included with what we talked about the regional problems that must be resolved and certainly that is one of them the United States was in that war considerably longer than the Soviet Union was and we never took an inch of territory from anyone as a result of the war and we feel that those islands should be restored to Japan and it came up with other things for example at the same time that we were praising them for their recent move in Afghanistan to return Afghanistan to its own people and we'll keep on discussing and negotiating and things of that kind and pointing out how well it would be received by the rest of the world Mr. President, on the issue of the assistance for the Nicaraguan resistance you're coming under renewed pressure to provide that assistance on the one hand from the State Department there are those who are saying that you won't be able to get it through Congress have you reached any decision what's your thinking at this point on what's needed is it time for more military assistance to push the negotiations back on track? I think it is so apparent that that is what is necessary that would be ridiculous for us for anyone to oppose it we went along with the peace plan that was agreed to among all the Central American states and to give it a chance it is apparent that the Sandinistas are not going to democratize a government in which the people had a decision to make in elections and so forth and it seems to me that the efforts that had been made in the Congress and succeeded in reducing and eliminating our ability to help the freedom fighters that that has literally given a signal to the Sandinistas that they can continue to hold out now if we want them to continue meeting and arriving at the settlement that the peace plan was supposed to bring about which had as one of its aims democracy in Nicaragua well I think then that we've got to restore the threat to the Sandinistas that they must see that the people of Nicaragua do have a force there that can be used to bring about an equitable settlement So you will ask for renewed military aid? We're discussing I'm not going to give any answer to anything right now we're discussing where we go from here and what we're going to do and some of their leaders as you know are here in Washington right now but I think it is evident that the Sandinistas were encouraged into thinking that maybe they could continue to hold out remember that when the revolution was going on against Samoza the revolutionaries went to the organization of American states and asked them to ask Samoza the dictator to step down in order to end the killing and the organization of American states asked the revolutionaries to give them what were the goals of the revolution and they were provided in writing and they were democracy and freedom for the people and all the things that the rest of us have and believe in and this is what was promised and Samoza stepped down and then the only really centrally organized group in the revolution the Sandinista organization a communist organization began getting rid of the other revolutionaries either by exile or execution or whatever and they established their communist government not a democracy and what this whole fight is about is to bring them back to the promises that were made to all the rest of us here in America about what kind of a democratic government they would have but as I say when the help was denied to the freedom fighters and it looked like if the Sandinistas had held out longer the freedom fighters would have to give up this isn't good enough Thank you Mr. President for your time today Pleasure. Sorry if I was long in some of the answers there It's your time Going back back to the first summit does it feel like it's been seven and a half years and it's Well obviously if I can't sell it to the American people they'll speak up and what we said about the Congress it isn't necessary to make the Congress in the light just make them feel the heat Thank you Mr. President what will you say is your major achievement of the running yet perhaps what is the major department or something that you would have liked to achieve Well, the economic recovery because just look we had a prime interest rate of 21.5 percent and we came here we had double digit inflation we had double digit unemployment those things have changed. And the interest rates are down to my mark. The unemployment, I told you about that when the result was. The inflation is way down now. And this, I think, was a great accomplishment. But it is still hindered by the deficit spending on the part of this company. And that has just become built in. About the mid-60s, the deficit spending started to increase so that in 15 years, between 1965 and 1980, our budget increased to five times what it had been. And the deficit increased to 52 times what it had been. Well, now, I wonder what that disappointed me that we haven't been able to get that done. So from the outside, I'll continue working on that. Mr. President, you've got about 60 people waiting. Thank you very much. Thank you very much. Good to see you all.