President Clinton Announces New Directive On Electronic Commerce


THE WHITE HOUSE
Office of the Press Secretary

For Immediate Release November 30, 1998



REMARKS BY THE PRESIDENT
AND THE VICE PRESIDENT
AT ELECTRONIC COMMERCE EVENT

Room 450
Old Executive Office
Building




12:02 P.M. EST

THE VICE PRESIDENT: Thank you very much, Mr. Secretary, and it's really a great honor to work with you and your great team at Treasury, particularly in such a time as this. You inspire such confidence here and around the world.

Mr. President, I would like to, on your behalf, acknowledge other members of your administration team who are here: Ambassador Charlene Barshefsky, our Special Trade Representative -- (applause) -- well, all of these people deserve applause -- (laughter) -- Administrator Aida Alvarez of the Small Business Administration; and Chairman Bill Kennard of the Federal Communications Commission; Administrator David Barram of the General Services Administration; Deputy Secretary of Commerce Bob Mallett -- and, as mentioned, he and Bill Daley at Commerce have played key roles in all of this -- the Chief of Staff here in the White House, John Podesta, who himself is quite an expert in these technologies; Ira Magaziner, about whom I'll have a few more words to say in just a moment; David Beier, my principal domestic policy advisor; and Sally Katzen at OMB. And David will be chairing this new task force and Sally will be his vice-chair. And don't ever underestimate the importance of that vice-chair position in any organization. It's very significant. (Laughter.)

Member of the House and Senate who are here -- Senator Conrad Burns of Montana, Senator Byron Dorgan of North Dakota, Senator Orrin Hatch of Utah, Senator Jay Rockefeller of West Virginia, Senator Ron Wyden of Oregon. And members of the House: Congressman Chris Cox and Congressman Chip Pickering. And let me say, these members of the House and Senate have been absolutely key to the movement forward for our country, and through our country, for the world's movement into this revolutionary new development. And we are very grateful for the bipartisan working relationship that we have on these issues. And I want to thank all of them and some of their colleagues who could not attend today, but these individuals have been great leaders on this issue.

To the members of the business community who are present, I'm not going to acknowledge everybody because there is such a wide array of leaders here. John Chambers, I'm going to introduce in a moment, from Cisco Systems. But there are a lot of other CEOs who are present. Meg Whitman will speak also, CEO of EBAY.

But I had the good fortune of meeting earlier over in the Roosevelt Room with a large group of CEOs in this industry, and I'm grateful for the chance to do that on a continuing basis. There are members of local and state governments here, and I can't acknowledge all, but I want to acknowledge Senator Scott Howell of Utah and Senator Kenneth McClintock, also here. And there are so many others, Esther Dyson -- I could single out a whole group of people here.

In the earlier meeting we were talking about some of the early days and some of the business leaders were researchers and technicians back in those days. I was recalling a very early prophecy of this development and I'd like to begin with words from the writer Nathanial Hawthorne -- some of you have heard this passage.

In 1851, inspired by the invention of the telegraph just 16 years earlier, he wrote these words: "By means of electricity the world of matter has become a great nerve, vibrating thousands of miles in a breathless point of time. The round globe is a vast brain, instinct with intelligence." Well, in all the years since, I don't think there's been any better description of what the Information Superhighway is becoming, what the global information infrastructure is now providing for hundreds of millions of people around the world. With 140 million users now around the world and 52,000 more Americans logging on for the first time every single day, the Internet is remaking the way we live, the way we learn, the way we work. More messages are now sent by e-mail than by regular mail. And what began as a specialized network for computer scientists has become a global nervous system for the entire world.

And even as we begin to feel the power of the Internet in almost every aspect of our lives, one of its most lasting impacts is just now emerging. You can see it on the covers of two of the three most prominent weekly news magazines in America that came out today, this week -- e-commerce; 27 million purchases are now made on the web every day.

I remember when President Clinton and I came into the White House in January of 1993, there were 50 sites on the Worldwide Web. The phrase was unrecognizable to most people. But now global electronic commerce is expected to grow to more than $300 billion annually in just a few years.

Nick Negropontie, known to many of us here, a long-time friend and head of the MIT Media Lab, has his own unique way of explaining this emerging global marketplace and its significance to the new economy. He often tells friends that if they remade the movie, "The Graduate," with Dustin Hoffman, somebody would walk up to his character and whisper in his ear, instead of "plastics," "transactions." (Laughter.)

In this emerging digital marketplace nearly anyone with a good idea and a little software can set up shop and then become the corner store for an entire planet. Who would have imagined that someone who simply wanted to find other people who were also interested in collection Pez candy dispensers -- you remember them -- would become EBAY, one of the fastest-growing companies today.

We were talking about that earlier and I was reminded of the prophecy of Marshall McLuhan several decades ago when he said that the content for the new media will be the old media. I don't think he had Pez dispensers in mind. But certainly we've seen amazing things happen.

And what E-based founders realized, and what Meg Whitman has captured so well, is the powerful idea that people need a central location if they're going to buy and sell unique items. The Internet makes any connected computer that central location, and any desktop can be a doorway to a global mall with a sign that says, "Open 24 hours a day, 7 days a week, 365 days a year."

And new developments are going to take this far beyond personal computers. The burgeoning world of new connected devices held in the hand, put on the belt, put in the purse, wherever, will be the new gateway to this global mall. And just as it helps companies like EBAY, it also opens the world to people like Helen Mutono, a Ungandan woman who uses the Internet to sell Ugandan baskets, with the money going to help children who have been orphaned by AIDS. Or the village near Chincehros, Peru, which has quintupled its income by forming an on-line partnership with an international export company which arranged for its vegetables to be shipped and sold in New York City.

In fact, by the year 2010, we can triple the number of people who can support their families because they can reach world markets through the Internet. And these developments in turn will drive the emergence of brand new phenomena just as exciting as e-commerce that we can't even imagine today. And while these incredible stories represent a quantum shift in commerce and the human condition, e-commerce is even broader than small entrepreneurs reaching a larger world. It is also about companies using the vast resources and networks to connect with each other through business-to-business electronic transactions.

For example, if you want to place a bid at EBAY, the information you convey with the click of a mouse most likely travels through Cisco routers. And how much does Cisco depend on the Internet? Well, they booked $100 million in sales on the Internet in 1996, and one year later it was more like $3.2 billion. This year it's about $100 million per week. With nearly seven out of ten customer orders coming in over the Internet, this is helping to make them one of the fastest growing companies in the history of the computer industry.

We were talking earlier about how, if you look at their market cap, this brand new -- relatively new company now has a market cap larger than that of General Motors and Ford combined. Just another straw in the wind indicating how powerful this new revolution is.

And this proliferation of Internet-based commerce is good for consumers. It is good for companies large and small. And it is awfully good for our economy. And we want it to continue. And that is why President Clinton and I have worked so hard to create a framework for global electronic commerce that would keep the Internet tax free, keep competition vigorous, protect consumers, children, and electronic privacy, and leave supervision not to the government, but to the people who know the Internet best.

It is also why we should hasten the completion of the infrastructure upon which electronic commerce and the Internet depend. The global information infrastructure, or GII, a network of networks that sends messages and images at the speed of light on every continent -- this would help us build a true global electronic village to expand access to all forms of communications, to improve the delivery of education and health care and all services, and to create new jobs and even whole new industries as yet unimagined.

The simple fact is that in today's global economy we are all connected. Global interdependence is not a policy, it is a reality. And that is why President Clinton's leadership in this area is so important. You know, Bob Rubin talked about those days in the transition. President Clinton was insistent that we do everything possible to accelerate these developments from day one.

And I want to especially thank Ira Magaziner for his years of dedicated work on this subject and for helping us so skillfully to move into the Information Age. Ira is a personal friend. He has brought his unique energy and creativity to the complete command of this subject matter and has done a really spectacular job. And before I introduce John Chambers I would like to ask all of you to join me in giving a round of applause to Ira Magaziner. Stand up, Ira. (Applause.) That wasn't in the notes that he gave me for suggested comments here. (Laughter.)

At this point I am very proud to present President Clinton with this new report which demonstrates our progress in electronic commerce over the past year in these key areas. Mr. President.

(The report is presented.)

THE PRESIDENT: Thank you very much. I feel like the fifth wheel here. (Laughter.) Most of what needs to be said has certainly been said.

I want to thank the Vice President for his outstanding leadership. I thank Secretary Rubin and Ambassador Barshefsky and, in his absence, Secretary Daley; Administrator Alvarez, Mr. Podesta and other members of the administration. I thank all the members of the high-tech community in various forms and permutations who are here in this audience today.

And I, too, want to thank the members of Congress for their invaluable help. In spite of the ups and downs of partisan debate in Washington, this is one area where we've managed to really pull together a broad bipartisan coalition of members of Congress to do a whole series of good things for America, through the Internet, over the long run.

I want to specifically thank Congress Cox and Senator Wyden for sponsoring the Internet Tax Freedom Act. I want to thank Senator Hatch, who led the efforts on the copyright protection legislation. I thank Senator Burns, the co-chair of the Internet Caucus and who, along with Senators Rockefeller and Dorgan, who are here, have played crucial roles on the Senate Commerce Committee in passing electronic commerce legislation; and Congressman Pickering, who has assisted us in the privatization of the domain name system and on many other issues. So I'd like to ask you to give these members of Congress a round of applause. I thank them for what they are doing. (Applause.)

I'm very grateful to John Chambers and Meg Whitman for being here today and for what they do with their own companies and what they represent for our countries futures. I've been wondering what I was going to do in a couple years. I think I could be a successful trader on EBAY, you know? (Laughter.) At least I know where I can go and get my political memorabilia now. (Laughter.)

I always liked John Chambers until I found out he had 70 vice presidents. (Laughter.) I don't know what to make of that. That he's more important than I am? He's less efficient than I am? (Laughter.) Or one great Vice President is enough. How's that? (Laughter and applause.)

I also want to thank my friend of 30 years now, Ira Magaziner, who has been acknowledged -- and he's here with his wonderful family -- for years of work, including many months when this work did not get anything like this level of attention which it has today.

As all of you know, Thanksgiving weekend marked the beginning of the holiday shopping center and a new holiday tradition. Last year, only 10 percent of those with home computers shopped for holiday gifts on line; this year the figure is predicted to be over 40 percent. On-line shoppers are buying everything from the latest electronics to old-time Babe Ruth and Lou Gehrig baseball cards, thanks to EBAY. This new era, therefore, will not only transform commerce, it will lift America's economy in the 21st century.

This Thanksgiving I had a chance again to give thanks for these good times in our country. Less than a decade ago, people were worrying that America could not keep up with global competition. Today we have the strongest economy in a generation, about 17 million new jobs, the largest real wage growth in 20 years, the lowest unemployment in 28 years, the smallest percentage of people on welfare in 29 years. And we're leading the world in the technologies of the future, from telecommunications to biotechnology.

The qualities rewarded in this new economy -- flexibility, innovation, creativity, enterprise -- are qualities that have long been associated with Americans and our economy. We have to keep this momentum going. That's really what we're here to celebrate, ratify, and commit ourselves to today.

I think the first thing we have to do is to stay with the economic policies that have worked for the past six years: fiscal discipline, expanding trade, investing in education and research and development. I think we have to do more work here at home to expand the benefits of the economic recovery to areas and people who have not yet felt it, and I think the internet has an enormous potential role to play there.

I believe, to keep this going, we're going to have to do more to contain the economic crisis in the world, to reverse it in Asia, and to deal with the long-term challenges to global financial markets, which Secretary Rubin and I and others are working very hard on.

But, finally, I think we have to clearly commit ourselves to making the most of what is clearly the engine of tomorrow's economy: technology. We have to make ourselves absolutely committed to the proposition that we will first do no harm. We will do nothing that undermines the capacity of emerging technologies to lift the lives of ordinary Americans and, secondly, that, insofar as we can, we will help to create an environment which will enhance the likelihood of success. That is what we are fundamentally celebrating today and committing ourselves to for tomorrow.

Information technology now accounts for more than a third of our economic growth. It has boosted our productivity and reduced inflation by a full percentage point. Obviously, few applications of this technology have more power than electronic commerce. If all the sales being conducted over the Internet were taking place at one shopping mall, that mall would have to be 30 times the size of the largest mall in the world, Minnesota's Mall of America. Five years from now, we would need a facility 1,000 times the size of the Mall of America to handle the volume of sales.

Now, to fulfill this promise, we have to create the conditions for electronic entrepreneurs. You've heard that discussed. That's why I asked the Vice President to coordinate, and Ira Magaziner to work on building a framework for global economic commerce back in late 1995. That's why we committed ourselves to the proposition that the Internet should be a free-trade zone with incentives for competition, protection for consumers and children, supervised not by governments, but by people who use the Internet every day.

This year 132 nations followed the U.S. lead by signing a declaration to refrain from imposing customs duties on electronic commerce. We reached agreements supporting our market-driven approach with the European Union, Japan, and other nations. Today, the Australian Prime Minister and I will issue a joint statement along these same lines. Working with Congress, industry, state and local officials, we passed a law to put a three-year moratorium on new and discriminatory taxes on electronic commerce. And again, I thank Secretary Rubin and Deputy Secretary Summers for their work on that.

We ratified an international treaty to protect international property on-line. We made it possible to conduct official transactions electronically. We secured the funds to challenge the nation's research community to develop the next generation Internet. We passed a law to protect the privacy of our children on-line. We're working with companies representing a large share of the Internet traffic to help them meet our privacy guidelines. We have effectively privatized the Internet's domain name and routing systems. We have moved to improve the security and reliability of cyberspace by focusing attention on protecting critical infrastructures and solving the Y2K computer problem.

Now, that's a pretty impressive line of work for all concerned. But we see there are still challenges to overcome. Many people who surf the Web still don't shop there. They worry they won't get what they thought they were paying for. They'll have nowhere to go if they get cheated. We've already begun to address these fears, not with burdensome regulations that might stifle growth and innovation, but with incentives for on-line companies to offer customers the protections they need.

We must do more. Our country has some of the strongest consumer protections in the world. Today, I ask Secretary Daley to work with the FTC and other agencies, consumer advocates industry, and our trading partners to develop new approaches to extend the proud tradition of consumer protection into cyberspace. To ensure truthful advertising and full disclosure of information are the foundations of global electronic commerce. People should get what they pay for on-line; it should be easy to get redress if they don't.

We must give consumers the same protection in our virtual mall they now get at the shopping mall. And if the virtual mall is to grow, we must help small businesses and families gain access to the same services at the same speed that big business enjoys.

For many people, connections are so slow that shopping at the virtual mall is filled with frustration. It is as if they had to drive over dirt roads to get to the mall, only to find an endless line of customers just waiting to get into the door. So today I'll also direct Secretary Daley and Ambassador Barshefsky to work with the FCC and our trading partners to promote greater competition to bring advanced high-speed connections into our homes and small businesses, to ensure that the Internet continues to evolve in ways that will benefit all our people.

Our nation was founded at the dawn of a period not so very unlike this one -- a period of enormous economic upheaval when the world was beginning to move from an agrarian to an industrial economy. Alexander Hamilton, our first Secretary of the Treasury, understood these changes well. In his remarkable Report on Manufacturers and other of his writings, Hamilton identified new ways to harness the changes then going on so that our nation could advance.

Listen to this. He proposed what many thought were radical ideas at the time: a central bank, a common currency, a national system of roads and canals, a crackdown on fraud so that American products would be known all over the world for quality. He created the blueprint that made possible America's Industrial Age and, many of us believe, the preservation of the American union.

Today we are drawing up the blueprints for a new economic age, not for starting big institutions, but for freeing small entrepreneurs. We have the honor of designing the architecture for a global economic marketplace, with stable laws, strong protections for consumers, serious incentives for competition -- a marketplace to include all people and all nations.

Now, I may not know as much about cable modems and T-1 lines as the Vice President -- (laughter) -- I think we made a living of jokes out of that for six years. But I do know, thanks to his and others' work, that electronic commerce gives us an extraordinary opportunity to usher in the greatest age of prosperity not only Americans, but people all over the world have ever known.

To me, the most moving thing said from this podium today involved the stories of people in Africa and Latin America lifting themselves from abject poverty through access to the Internet. That can happen to more than a billion other people in ways that benefit all of us, if we do this right.

We have made a good beginning. I am confident we will finish the job. Thank you very much. (Applause.)



What's New - November 1998

Little Rock Central High School

Happy Thanksgiving

Business Leaders

Signing Ceremony Remarks

Veterans Day Ceremony

Korean Community Leaders

Strong, Enforceable Patients' Bill of Rights

Economic Advisors Remarks

Thanksgiving Turkey Presentation Ceremony

New After-School Care Grants

Social Security

White House Crime Event

Conference Remarks

Regarding Iraq

National Adoption Month

Congressional Leaders

State Tobacco Settlement

New Directive On Electronic Commerce

The President's Export Council

Departure for Asia Remarks

Town Hall Meeting In Tokyo


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