NAFTA MONITOR VOLUME I, NUMBER 2 Tuesday, January 4, 1994 Headlines: NAFTA GOES INTO EFFECT REBELLION IN SOUTHERN MEXICO LINKED TO NAFTA GE WILL REHIRE 6 OF 11 FIRED MEXICAN UNION ACTIVISTS UAW WILL BE "WAITING" FOR 15,000 JOBS PROMISED UNDER NAFTA CANADIAN RETAILERS FAVOR BORDER TAX HIKE ________________________________________________________ NAFTA GOES INTO EFFECT The North American Free Trade Agreement went into effect January 1, immediately eliminating tariffs on about half of U.S. exports to Mexico and 75 percent of U.S. imports from Mexico. Many barriers between Canada and Mexico were also lifted. Most Canada-U.S. trade is already duty-free under the Canada-U.S. Free Trade Agreement. Among the U.S. exports to be stripped of tariffs immediately are computers, airplanes, X-ray equipment, telephones and many agricultural goods. Among the items Mexico can now ship duty-free to the United States are an assortment of car parts, electronic goods, furniture, televisions, radios, toys and tequila. By the year 2004, less than 1 percent of the trade between the countries will be subject to tariffs. In a Friday editorial, Mexico's government-owned EL NACIONAL newspaper said NAFTA represents the beginning of "an era whose perspectives are not only very promising but also somewhat unpredictable, above all in its first months and years. With the elimination of tariffs, nobody knows with precision how the flows of business and investment will behave," it said. Canadian Trade Minister Roy MacLaren will visit Mexico and Chile this week to discuss NAFTA and the possibility of Chile joining the trade pact. "I look forward to discussing Chile's possible accession to the NAFTA during my stay in Santiago," MacLaren said in a statement. "Both of our countries can enhance their economic growth and competitiveness by further liberalizing trade." Sources: Joseph B. Frazier, "Mexico-NAFTA," AP, December 28, 1993; Jeff Franks, "Long-Established Trade Barriers to Tumble," REUTER, December 31, 1993; "Canada to Discuss Chilean Membership of NAFTA," REUTER, December 31, 1993. ________________________________________________________ REBELLION IN SOUTHERN MEXICO LINKED TO NAFTA Hundreds of Indian guerrillas battled police in the southern Mexican state of Chiapas to protest implementation of NAFTA and the widely reported abuses of Indian peasants by powerful, wealthy landowners in the region. At least 56 people, including 22 police and 24 rebels, were reported killed during two days of fighting. The rebels reportedly took control of four cities and perhaps six villages. A leader of the Zapatista Army of National Liberation said the revolt was timed to coincide with the implementation of NAFTA and that it was launched to protest the growing economic inequalities in Mexico. The group declared war on the Mexican government and denounced the Salinas administration as "illegitimate." A rebel commander declared: "We will control the entire country, including the capital." Mexico had not experienced an armed uprising since the 1970s. Source: Tod Robberson, "55 Killed in Fighting in Southern Mexico," WASHINGTON POST, January 3, 1993; Tim Golden, Mexican Troops Battling Rebels; Toll at Least 56," NEW YORK TIMES, January 3, 1994. ________________________________________________________ GE WILL REHIRE 6 OF 11 FIRED MEXICAN UNION ACTIVISTS General Electric Co. announced it will reinstate six of the 11 Mexican labor organizers it fired last month. The United Electrical, Radio and Machine Workers of America (UE) and the Teamsters union had strongly protested the firings, which came just days after Congressional approval of NAFTA and only weeks after the workers had met with UE members in Juarez. The workers were involved in an organizing campaign for the Authentic Labor Front, Mexico's only independent labor group. In announcing the rehirings, GE reportedly told U.S. labor officials the six workers had mistakenly been fired for insubordination. Union leaders have also accused Honeywell Inc. of firing 20 workers trying to organize a factory in Chihuahua. The company, which says the firings are unrelated to union activity, has not responded to the protests. U.S. labor leaders welcomed the GE rehirings, but called on GE and Honeywell to reinstate all fired workers. UE General Secretary-Treasurer Amy Newell said the firings violated the labor rights language of NAFTA. "President Clinton and Congress assured the American people that labor and human rights would be respected on both sides of the border," she said. "These gross violations of Mexican workers' rights deserve the attention of both President Clinton and Congress. We demand an investigation." Sources: Tim Shorrock, "6 Fired Union Activists Rehired by GE in Mexico," JOURNAL OF COMMERCE, December 27, 1993; Anthony Spinelli, "GE Plans to Recall Workers," CONNECTICUT POST, December 25, 1993; "U.S. Union Protests Help Win Reinstatement of Mexican Workers Fired by General Electric," UE LABOR NEWS. ________________________________________________________ UAW WILL BE "WAITING" FOR 15,000 JOBS PROMISED UNDER NAFTA Prior to NAFTA's passage, President Clinton and auto manufacturers claimed the trade pact would enable the Big Three automakers to export 60,000 cars to Mexico and create 15,000 new auto-related jobs. Despite those assurances, the United Auto Workers (UAW) union remained steadfastly opposed to NAFTA. But now that NAFTA has passed the UAW will be checking the accuracy of those claims. "We're going to be waiting and looking with bated breath for those 15,000 good-paying jobs," said UAW President Owen F. Bieber. "By God, I'll tell you this, we're going to keep tabs of how many (cars) are sold there, and we're going to remind people of this." Already, top executives of the Big Three have cast doubt on the likelihood of those forecasts coming true. "The 60,000 number -- I have to tell you, I have not ever discussed that number, nor do I know the origin of it," said Robert J. Eaton, chair of Chrysler Corp. Bieber points out that the American Automobile Manufacturers Association, the Big Three's trade association, often cited the figure. Source: James Bennet, "U.A.W. Wants Trade Payoff in Jobs," NEW YORK TIMES, January 1, 1994. ________________________________________________________ CANADIAN RETAILERS FAVOR BORDER TAX HIKE Many Canadian retailers are urging their provincial governments to impose taxes on goods purchased in the U.S. by Canadian citizens making cross-border shopping trips. "International trade agreements are fundamental to our basic principles," said Bill Draper, president of the Winnipeg Chamber of Commerce. Draper urged the Manitoba government to impose a sales tax on cross border shoppers "because it was hurting some of our merchants." Manitoba imposed a 7 percent provincial sales tax on merchandise purchased in the United States beginning last July. New Brunswick and Quebec imposed sales taxes of 11 and 8 percent on items bought in New England states. Source: Pat Doyle, "In Canada's Provinces, It's Unfree Trade Pact," MINNEAPOLIS STAR & TRIBUNE, December 20, 1993. ________________________________________________________ Resource: "Worker Rights News," is a quarterly publication covering international labor rights. Included in the fall 1993 issue are several articles describing current labor organizing events in Mexico. International Labor Rights Education and Research Fund, 100 Maryland Avenue, NE, Box 74, Washington, D.C. 20002. Tel: (202) 544-7198 Fax: (202) 543-5999 Email: laborrights@igc.apc.org. Subscription: $15/individual, $25/organization. ________________________________________________________ Editor: Kai Mander The Institute for Agriculture and Trade Policy (IATP) 1313 Fifth Street SE, Suite #303, Minneapolis, MN 55414-1546 USA Telephone:(612)379-5980 Fax:(612)379-5982 E-Mail:kmander@igc.apc.org ________________________________________________________