From iatp@igc.apc.org Date: 04 Aug 94 19:58 PDT From: IATP Reply to: "Conference trade.news" To: "Recipients of conference trade.news" Newsgroups: trade.news Subject: NAFTA & Inter-Am Monitor 8/1/94 Produced by the Institute for Agriculture and Trade Policy - - - - - - - - - - - - - - - - - - NAFTA and Inter-American Trade Monitor, vol. 1, #10 August 1, 1994 - - - - - - - - - - - - - - - - - - HEADLINES LOCKHEED THREATENS CANADIAN GOVERNMENT WITH NAFTA CANADIAN FREE TRADE AND BEYOND CERTIFICATE OF ORIGIN RULES POSTPONED TOXIC WASTE IMPORT BAN DERAILED MEXICAN NAFTA LABOR AGENCY CREATED VENEZUELA STATE OF EMERGENCY CONTINUES GATT SAYS US SHOULD END TUNA BOYCOTT LATIN AMERICAN BANANA PRODUCERS MEET RESOURCES/EVENTS - - - - - - - - - - - - - - - - - - LOCKHEED THREATENS CANADIAN GOVERNMENT WITH NAFTA Taking advantage of NAFTA provisions that require fair-market compensation in case of expropriation, Lockheed may fight Canadian legislation canceling an airport development deal. As a US company, Lockheed would be protected by NAFTA, although its Canadian partners would not. The now-challenged deal provided for redevelopment of two terminals of Toronto's Pearson airport by a consortium of private investors under a 57-year lease. Shortly after it was elected, the Liberal Chretien government sought to cancel the deal, saying that it suspected political manipulation and excessive lobbying. The Liberal- dominated House of Commons approved a bill that would strip consortium members of their right to sue for cancellation of the contract, limiting compensation to out-of-pocket expenses. The Tory- controlled Senate amended the bill, which is now in limbo until September. According to Maude Barlow of the Council of Canadians, this is one more case of US. corporations using NAFTA to intimidate Canadian governments. Barlow cited the withdrawal of public automobile insurance plans by Ontario three years ago, in part because of threats by US.-owned insurers to seek compensation, and the failure of plain cigarette packaging legislation after threats by Philip Morris tobacco company to seek NAFTA damages. Article 11 of NAFTA provides that investments can't be nationalized or expropriated unless fair compensation is paid "in accordance with due process of law." Source: Alan Freeman, "US. Firm Considers Pearson Challenge," THE GLOBE AND MAIL, 7/20/94 - - - - - - - - - - - - - - - - - - CANADIAN FREE TRADE AND BEYOND After 127 years of inter-provincial trade barriers of various sorts, Canada's 10 provincial premiers and Prime Minister Jean Chretien signed a 200-page agreement aimed at reducing barriers to trade within the country. The agreement was criticized by business groups and some of the premiers because of exemptions, including the right of provinces to erect trade barriers for "social" reasons and continuing barriers to agricultural trade and to commerce in beer and wine. Under NAFTA, provincial governments must treat the US the same as other provinces. Prime Minister Jean Chretien called for an expanded NAFTA to be part of the agenda for the Miami summit later this year. Chretien said Chile would probably be the next country to qualify for NAFTA membership. In a congressional hearing, US Commerce Secretary Ron Brown praised the "political and economic democratization of Latin America," predicting that, just as the Asian tigers prospered in the 1980s, the "South American jaguars" are poised to pounce in the 1990s. Brown said, however, that it was unlikely that Chile or any other country would join NAFTA by the end of the year. Source: Peter Morton, "Canada Signs Pact to Topple Barriers to Internal Trade," JOURNAL OF COMMERCE, 7/19/94; Robert Kozak, "Canada's Chretien Says NAFTA Should Be Expanded," REUTER, 7/19/94; Lyndsay Griffiths, "US. Hails Latin "Jaguars" But No Quick Trade Ties," REUTER, 7/20/94 - - - - - - - - - - - - - - - - - - CERTIFICATE OF ORIGIN RULES POSTPONED US business leaders succeeded in persuading Mexican commerce officials to indefinitely delay enforcement for non-NAFTA certificate of origin rules, which had been set to take effect on July 15. The rules are designed to stop the influx of Chinese goods flooding Mexico. US businesses are involved because retailers have to present the original certificate of origin for goods being imported in Mexico. Many US retailers import large volumes from Asia, presenting the original certificate of origin to US Customs, and then export a portion of the goods to Mexico. Other Chinese goods reach Mexico after being transshipped through a third country, such as North Korea, in a practice known as triangulation. Mexico has imposed steep duties on Chinese goods that are being sold there at below-production costs. Mexico has asked trading partners to designate representatives that can be recognized by its commerce department (Secofi) to certify countries of origin on re-exported goods. US businesses want self- certification or, failing that, independent, non-governmental certification. Source: Kevin G. Hall, "Delay Sought on Non-Nafta Certificate of Origin," JOURNAL OF COMMERCE, 7/13/94; Kevin G. Hall, "Mexico Indefinitely Delays Its Certificate of Origin Rule," JOURNAL OF COMMERCE, 7/14/94; Kevin G. Hall, "US Firms Ask Mexico to Make Further Changes to Import Rules," JOURNAL OF COMMERCE, 7/18/94 - - - - - - - - - - - - - - - - - - TOXIC WASTE IMPORT BAN DERAILED In mid-July, the Mexican Chamber of Deputies defeated an environmental protection bill amendment that would have banned the import of toxic wastes into Mexico. The amendment originally called for a ban on new imports and gave firms presently importing toxic wastes four years to close their operations. The new provisions made exceptions for firms bringing in wastes for "other than final dumping." Greenpeace, an international environmental group, charged that Mexico's Zinc National Company in Monterrey and Cementos Mexicanos (CEMEX) and the US Mobley Environmental Services had formed a joint venture called "Pro-ambiente" to import industrial wastes from the US. According to Greenpeace, toxic wastes will be used as an alternative combustible in cement furnaces. Source: "Ban on Toxic Waste Imports Derailed," IPS, 7/15/94 - - - - - - - - - - - - - - - - - - MEXICAN NAFTA LABOR AGENCY CREATED The National Administrative Office for the North American Labor Cooperation Agreement (Oficina Administrativa Nacional para el Acuerdo de Cooperacin Laboral de America del Norte) was created, effective July 6, within the Secretariat of Labor and Social Planning. The new office will deal with NAFTA labor issues and draft related laws, regulations, and procedures for Mexico, and will issue opinions on North American labor issues. Source: "Mexico Creates Entity to Oversee NAFTA Labor Issues," INTER-AMERICAN TRADE AND INVESTMENT LAW, 7/15/94 - - - - - - - - - - - - - - - - - - VENEZUELA STATE OF EMERGENCY CONTINUES Despite Congressional restoration of some civil liberties suspended by Venezuelan President Rafael Caldera on June 27, the president reimposed the suspension, insisting the measures were necessary to safeguard currency and stabilize the banking system. Price controls on food and medicine accompanied restrictions on foreign exchange and government seizure of many banks. Criticism has come from many directions, ranging from human rights groups' denunciation of the suspension of individual liberties to right-wing critics' charges that Caldera has plunged Venezuela into socialism. Finance Minister Julio Sosa said that the price and currency controls will be lifted once the fiscal deficit is eliminated and inflation controlled, hopefully by the end of 1994. A criminal court judge issued sixteen arrest warrants against pharmaceutical company executives, including Ciba-Geigy, Eli Lilly, Merck, Rhone-Poulenc, Roche, Sandoz, and Servier. The judge claims that drug companies submitted price lists with inflated prices in order to avoid price controls on medicines. An industry association representative said that the drug companies cannot live with prices frozen at December 1993 levels, given the inflation that Venezuela has seen since that time. Source: "Venezuela Suspends Legal Rights," ASSOCIATED PRESS, 7/24/94; Carlos Ball, "Venezuela Plunges Headlong into State Socialism," WALL STREET JOURNAL, 7/22/94; Joseph Mann, "Judge Arrests Drug Company Chiefs," FINANCIAL TIMES, 7/21/94; Estrella Gutierrez, "Government, Congress Clash Over Suspension of Rights," IPS, 7/22/94; Estrella Gutierrez, "Government Hopes Crisis Will Be Over This Year," IPS, 7/18/94 - - - - - - - - - - - - - - - - - - GATT SAYS US SHOULD END TUNA BOYCOTT A GATT panel created in 1992 to deal with a complaint from Mexico and Venezuela about a US law prohibiting tuna purchases from the two countries has recommended that the US should change its law. The panel called the law economic protectionism cloaked as environmentalism. The GATT Council - the highest authority - will consider the report at its September session. Source: "GATT Recommends That US. Buy Mexican, Venezuelan Tuna," IPS, 7/20/94 - - - - - - - - - - - - - - - - - - LATIN AMERICAN BANANA PRODUCERS MEET Representatives of Latin America's banana-growing countries met in San Jose, Costa Rica in mid-July, and agreed to form a high-level working group and meet again in Managua on August 3. Costa Rica, Ecuador, Colombia, Guatemala, Mexico, Nicaragua, Honduras, Panama, and Venezuela agreed to strengthen the Union of Banana-Exporting Countries (UPEB) or to create a new association to deal with a banana glut that has sent prices plunging and with the European Union quota on Latin American bananas. Ecuador, the world's top banana- exporter, is not a member of UPEB, but participated in the meeting and said it was studying the possibility of joining UPEB. Costa Rica, criticized by some other producing nations for accepting the EU quota, appeared to be ready to stand together with the other Latin American banana producers once again. The impetus for the meeting comes from a growing world surplus of bananas. UN data indicates that the world produces nine percent more bananas than it consumes, with prices now at their lowest levels in six years. About eight million of the 11 million metric tons of bananas now on world markets comes from Latin America. US banana prices have fallen from the 1991-92 price of $13-15 for an 18 kg crate to only four dollars today. The crate sells for five dollars in Europe, though European consumer prices vary, with German prices higher than a year ago and French and British prices lower. Germany has threatened a second legal action against the EU banana quota in the European Court of Justice, though chances of winning its first suit appear slim. Source: "Latin America Seeks United Stand on Bananas," IPS, 7/21/94; "Sobreoferta Reunifica a Paises Bananeros," "Ecuador Frente al Reto del Banano," SERVIDATOS, 7/25/94; Debra Percival, "Commission Pat on the Back Misplaced, Say Exporters," IPS, 7/13/94 - - - - - - - - - - - - - - - - - - RESOURCES/ EVENTS "Roundtable on Specific Mechanisms for Addressing Human Rights in the Trilateral Context of North American Economic Integration," October 1-3, 1994, Ottawa, Canada. Contact Gregory Binowsky, Common Frontiers, 3 York Street, Suite 301, Ottawa, Ontario, K1N 5S6, CANADA. Tel: (613) 562-0670. Fax: (613) 562-0327. "Down to Earth: An International, Transdisciplinary Conference." October 24-28, 1994, San Jose, Costa Rica. Organized by the International Society for Ecological Economics (ISEE), Costa Rica's Universidad Nacional, and the Interamerican Institute for Cooperation on Agriculture. Contact III International Conference of Ecological Economics, PO Box 555, 3000 Heredia, Costa Rica. Tel: 506-60-1600. Fax: 506-37-6868 - - - - - - - - - - - - - - - - - - The NAFTA and Inter-American Trade Monitor is available in both English and Spanish on Association for Progressive Communications (APC) computer networks on the conference eai.news. It can also be faxed or sent via mail on request. We welcome your comments and contributions. - - - - - - - - - - - - - - - - - - Produced by: Mary C. 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