NAFTA MONITOR Volume I Number 4 January 20, 1994 ------------------------------------------------------------ Headlines: -TRADE LEADERS SAY CHIAPAS UPRISING WILL HAVE LITTLE EFFECT ON NAFTA -NEW NAFTA WORKING GROUPS PROPOSED -CLINTON FOLLOWS THROUGH WITH NAFTA PROMISE -NINTENDO MOVES PLANT TO MEXICO -BORDER TRAFFIC ON THE RISE: FUNDING IN QUESTION -HAZARDOUS WASTE MOVES ACROSS BORDER -GALLUP POLL SHOWS NAFTA GAINING SUPPORT IN CANADA -RESOURCE: CHIAPAS DIGEST ------------------------------------------------------------ TRADE LEADERS SAY CHIAPAS UPRISING WILL HAVE LITTLE EFFECT ON NAFTA Trade ministers from the United States, Canada and Mexico declared after their first ministerial meeting since January 1 when NAFTA went into effect that the peasant uprising in Chiapas, Mexico would have no impact on NAFTA implementation. "I don't believe the situation in Chiapas will have anything to do with the effective implementation of NAFTA or its success," said U.S. Trade Representative Mickey Kantor. The Zapatista National Liberation Army (EZLN) initiated an armed uprising New Year's Day to press the Mexican government for improved indigenous rights, justice, free elections and basic services for the peasants. The EZLN issued a formal communiqu to Mexican President Carlos Salinas de Gortari Monday demanding their rights and also sent a letter to U.S. President Bill Clinton warning him that the Mexican government has used U.S.-supplied "planes, helicopters, radar, communications equipment and weapons .... not to fight drug traffickers ... but to repress the just struggle of the Mexican people and the indigenous people of Chiapas." Mexico City's daily newspaper LA JORNADA reported that U.S. officials received assurances from the Mexican government that U.S. military equipment, supplied to combat the war against drugs, was not used to fight against the EZLN. For more information on the Chiapas uprising see RESOURCE below. Sources: Anita Snow, "Mexico-Rebellion," AP, January 18, 1994; Christine Tierney, "Mexican Rebels Ask President Clinton for Support," REUTER, January 17, 1994; "NAFTA Trade Ministers See No Effect From Chiapas," REUTER, January 14, 1994; Charles Wilbanks, "Caught in the Crossfire," EL FINANCIERO INTERNATIONAL, January 10-16, 1994. ------------------------------------------------------------------ NEW NAFTA WORKING GROUPS PROPOSED Canadian International Trade Minister Roy MacLaren called for the creation of two new working groups under NAFTA to handle anticipated dumping charges and subsidy complaints. MacLaren issued the proposal during a two-day visit to Mexico City last week and said the initiative resulted directly from Canada's four-year free trade experience with the United States, which he admitted "has not been easy." "What we are proposing," he said, "is that the free trade agreement be provided with all of the necessary tools to prevent situations such as those that have occurred on the bilateral level." During his visit MacLaren, U.S. Trade Representative Mickey Kantor and Mexican Trade Minister Jaime Serra Puche agreed to begin talks on accelerating tariff reductions. Mexico wants to speed up the tariff reduction process for a number of goods including, citrus products, flat glass, garments and shoes. Kantor said tariff reduction talks would begin soon. Sources: "Canadian Trade Chief Visits Mexico," EL FINANCIERO INTERNATIONAL, January 10-16, 1994; "NAFTA Trade Ministers See No Effect From Chiapas," REUTER, January 14, 1994. ------------------------------------------------------------ CLINTON FOLLOWS THROUGH WITH NAFTA PROMISE U.S. President Bill Clinton followed through on a last-minute promise made to peanut-state and wheat-state lawmakers during the NAFTA debate. Clinton ordered the U.S. International Trade Commission (ITC) Wednesday to open investigations of U.S.-Canada farm trade. American farmers claim that Canada has depressed U.S. wheat and peanut prices by "dumping" unfairly subsidized grain in U.S. markets after the U.S.-Canada Free Trade Agreement was signed in 1989. Farmers in Montana recently blockaded delivery of Canadian wheat to a grain elevator to express their growing anger. Earlier this week, Canada offered to end transportation subsidies on wheat provided the United States did not sell subsidized grain to Mexico. A settlement was not reached. The Clinton administration threatened to impose quotas on Canadian wheat if the ITC finds that Canada's shipping subsidy hinders U.S. farm policy. ITC investigations, on average, take six to nine months. Sources: Philip Brasher, "Canada-Wheat," AP, January 18, 1994; "Canada Offers to Limit Wheat Exports to U.S.-Paper," REUTER, January 15, 1993; Nancy Dunne, "U.S. Farmers Seek Curbs on Canadian Wheat," FINANCIAL TIMES, January 20, 1994. ------------------------------------------------------------ NINTENDO MOVES PLANT TO MEXICO Nintendo, a U.S. video game producer, announced plans to relocate its only U.S.-based plant to Mexico. In less than 60 days, 136 workers at the plant will be laid off. Phil Rogers, vice president of U.S.-based operations for Nintendo, said the company decided to relocate the plant to Mexico to "better serve" rapidly growing markets in Latin America, and had nothing to do with NAFTA implementation. "The timing is purely coincidental because we would have made this move with or without NAFTA," Rogers said. Video game machines and software produced for the United States, Nintendo's biggest market, are made in Japan. Source: "Nintendo Moving U.S. Production to Mexico," REUTER, January 11, 1994. ------------------------------------------------------------ BORDER TRAFFIC ON THE RISE: FUNDING IN QUESTION The Transportation Department recently released a report stating that U.S. border states have not done enough to prepare for increased traffic under NAFTA. However, the report concludes that there is no immediate need for a separate federal fund to pay for new and improved crossings. Representative Henry Bonilla (R-TX) disagreed with the report's findings that bridges, tunnels and facilities housing federal inspection agencies at the border appear "adequate ... for the foreseeable future." Bonilla said "it doesn't take a rocket scientist to see that border crossing facilities in Texas already have problems." Bonilla and Representative Ronald Coleman (D-TX) said they are disappointed that Transportation Secretary Federico Pena is not calling for major federal investment to improve border crossings. Pena is scheduled to meet with his Mexican and Canadian counterparts in Washington this March to discuss NAFTA's impact on border crossings and transportation. Source: James H. Rubin, "Border Crossings," AP, January 11, 1994. ------------------------------------------------------------- HAZARDOUS WASTE MOVES ACROSS BORDER More than 72,000 tons of hazardous waste were shipped from the United States to Mexico for recycling and confinement last year, according to the Environmental Protection Agency (EPA). Approximately 6,500 tons of hazardous waste produced in Mexico- based maquiladoras were shipped back to the United States. The EPA also reported that three U.S. companies operating maquiladoras were cited for omissions in documentation required for the importation of hazardous waste. The three companies, Gi Corporation, Transportation Electronics and Delco Chassis, could be fined a total of $115,000 if found guilty. Source: "U.S. Shipped 72,000 Tons of Hazardous Waste," EL FINANCIERO INTERNATIONAL, January 10-16, 1994. -------------------------------------------------------------- GALLUP POLL SHOWS NAFTA GAINING SUPPORT IN CANADA A majority of Canadians still oppose NAFTA, but the most recent GALLUP POLL indicates opposition is weakening. Forty percent of those polled said they favor NAFTA, the highest level of Canadian support recorded during the past four Gallup polls. Forty-two percent remain opposed and the remaining 18 percent declined to comment. Source: "Support for NAFTA Hits All-Time High, Poll Says," TORONTO STAR, January 3, 1994. --------------------------------------------------------------- RESOURCE The Institute for Agriculture and Trade Policy is temporarily producing a weekly bulletin called "CHIAPAS DIGEST" and is available for free by electronic mail or by fax. CHIAPAS DIGEST includes news, analysis and declarations on the peasant uprising in Chiapas, Mexico. For more information contact: Hannah Holm, IATP, (612) 379-5980 fax (612) 379-5982 e-mail hholm@igc.apc.org ------------------------------------------------------------- Editor: Gigi DiGiacomo 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