NAFTA MONITOR VOLUME I, NUMBER 5 Tuesday, January 25, 1994 _____________________________________________________________ Headlines: U.S. ASSIGNS AGENCIES TO HEAD DEVELOPMENT OF NAFTA COMMISSIONS LEADERS IMPLEMENT "BUY MEXICAN" CAMPAIGN COALITION DEMANDS FUNDS FOR U.S.-CANADIAN BORDER MEXICO PLANS MORE PRIVATIZATION CONAGRA SIGNS DEAL WITH MEXICAN AG COMPANY RESOURCES _____________________________________________________________ U.S. ASSIGNS AGENCIES TO HEAD DEVELOPMENT OF NAFTA COMMISSIONS The Environmental Protection Agency (EPA) was named to head the U.S. task force organizing the trinational Commission for Environmental Cooperation (CEC) established under NAFTA. Most key decisions on setting up CEC will require coordination and cooperation with Mexico and Canada. But EPA and U.S. environmental sources say their north and south NAFTA partners have been slower in moving forward in preparations because of election-related shifts in personnel. EPA Administrator Carol Browner is scheduled to meet with top Mexican and Canadian environmental officials next month to begin talks on CEC development. The joint deputies group of the U.S. National Economic Council and the National Security Council also appointed the Treasury Department to lead organization efforts of the North American Development Bank and the State Department to head U.S. coordination of the Border Environment Cooperation Commission. Source: "EPA To Coordinate U.S. Role in Setting Up NAFTA Green Commission," INSIDE NAFTA, Vol. 1, No. 1, January 12, 1994. _____________________________________________________________ LEADERS IMPLEMENT "BUY MEXICAN" CAMPAIGN Mexico Commerce Secretary Jaime Serra Puche and Finance Secretary Pedro Aspe Armella teamed up with business leaders last November to organize a national advertising campaign aimed at curbing consumer purchases of foreign goods. Mexican toy, textile, candy and shoe industries have been struggling for sales since Mexico joined the General Agreement on Tariffs and Trade in 1986 and many other manufacturers fear NAFTA will have the same the same effect. The National Advertising Council of Mexico said it took them three months to develop and produce the "made in ... chismo" campaign. No flags, logos or brands are included in the advertisements, which appear in almost every national magazine and on television. All the advertisements show two products -- one foreign versus one domestic -- and urge Mexican consumers to compare quality, price and service before buying. The TV ad states "not all imported goods are high-quality. Some will disappoint you." Some Mexican consumers complain that it is hard to buy Mexican-made goods when store shelves are filled with cheap, well advertised imports. Although the ad campaign is scheduled to last only one year, sponsors are willing to extend it for up to five years if it is successful. Source: Claudia Fernandez, "Made in Mexico," EL FINANCIERO INTERNATIONAL, January 17-23, 1994. _____________________________________________________________ COALITION DEMANDS FUNDS FOR U.S.-CANADIAN BORDER A coalition of eight U.S. border states and three Canadian provinces are calling for $7 billion in funding over the next 20 years to improve border-crossing facilities. The coalition said severe congestion already exists along the "forgotten" U.S.-Canadian border and it is worried that most funding for infrastructure improvements and for additional border crossing personnel will be channeled to the U.S.-Mexico border. U.S. members of the coalition "strongly protest any shifts of U.S. Customs and/or immigration forces from the northern U.S. border to the southern border with Mexico." U.S. Customs employs less than 1,000 inspectors along the northern border. Representatives of regional governments say there are three times more trade crosses per year between the U.S. and Canada than along the U.S.-Mexico border, where more than 1,500 inspectors are employed. The coalition outlined work needed on 62 highway crossings, 20 railroad crossings and six ferry crossings. Meanwhile, the Border Trade Alliance, organized by state and local government administrators and business persons from both sides of the U.S.-Mexico border, will meet with their northern counterparts in late February to devise a "seamless border" association. The group hopes to create one united front to press legislative and infrastructure initiatives. Sources: "U.S.-Canadian Coalition Seeks Funds to Improve Border Crossings," JOURNAL OF COMMERCE, January 18, 1994; "U.S.-Mexico Border Group to Build Ties With Northern Counterparts," INSIDE NAFTA, Vol. 1, No. 1, January 12, 1994. _____________________________________________________________ MEXICO PLANS MORE PRIVATIZATION The Mexican government announced plans to privatize four companies, worth approximately $260 million, this year. Up for sale will be Ocean Garden, a seafood trading company; three paper mills; a newspaper chain with five publications; and a system of warehouses scattered throughout Mexico. Jorge Silberstein, an official at Mexico's Office of Privatization, said he expects the warehouses to sell for "lots and lots of money." U.S. paper companies are expected to be among the bidders for the paper mills, while some international investors have already shown strong interest in Ocean Garden. As for the newspapers, Silberstein said, "We haven't figured out what to do." The government may also be preparing Pemex, the government- owned oil company, for sale sometime during the next presidential term, according to an article in the WALL STREET JOURNAL. "Right now, (Pemex) isn't going to be sold," Silberstein said, but he added that the oil company is beginning to look for joint ventures and sales of some assets. Source: Craig Torres, "Mexico Plans to Sell Four Firms as Part of Privatization," WALL STREET JOURNAL, January 21, 1994. _____________________________________________________________ CONAGRA SIGNS DEAL WITH MEXICAN AG COMPANY ConAgra Inc. signed an agreement with the Mexico City-based holding company, Desc Sociedad de Fomento, allowing the U.S. agriculture giant to purchase 20 percent of Desc's pork and poultry subsidiary, Univasa. Desc's Chairperson and CEO Fernando Senderos Mestre praised the agreement. "Coming on the heels of the recently implemented NAFTA accord this union is a significant step in achieving our goal of discovering new venues to market our food products," Mestre said. ConAgra has the option to purchase up to 49.9 percent of Univasa, whose annual sales average $185 million, during the next four years. Sources: "ConAgra Deal Signed," EL FINANCIERO INTERNATIONAL, January 17-23, 1994; "ConAgra Buys Into Mexican Ag Company," AGRIBUSINESS, January 17, 1994. _____________________________________________________________ RESOURCES: LATINAMERICA PRESS, Volume 25, Number 47, December 23, 1993. 7 pages. $1.75. Accounts Desk, Apartado 18-0964, Lima 18, Peru. This weekly publication covers emerging trends in Latin America. Included in this issue is a review of Mexico's PRI presidential candidate and the ruling party's control of Mexican media. TWIN PLANT NEWS, Volume 9, Number 5. 98 pages. $15.00. 4110 Rio Bravo Dr., Suite 108, El Paso, TX 79902. (915) 532-1567. Fax: (915) 544-7556. This magazine, directed at U.S.-owned maquiladora operators and investors, is a guide to "doing business in Mexico." Included are lists of Mexico's top auto, food, financial, commerce, electronic, textiles, glass and agriculture companies (10 of the top 100 are U.S. giants) as well as leading import and export companies. INSIDE NAFTA, INSIDE U.S. TRADE. Yearly subscription $595.00. P.O. Box 7167, Washington, DC 20077. (800) 424-9068. Fax: (703) 416- 8543. This new publication will focus on tariff, countervailing duty/antidumping actions, NAFTA dispute settlement, environmental and labor policymaking, related trade policymaking, non-NAFTA Americas trade pacts and other Mexican and Canadian trade and investment initiatives. _____________________________________________________________ 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 _____________________________________________________________