From iatp@igc.apc.org Date: 06 Sep 94 05:42 PDT From: IATP Reply to: "Conference trade.news" To: "Recipients of conference trade.news" Newsgroups: trade.news Subject: NAFTA & Inter-Am Monitor 9/ Produced by the Institute for Agriculture and Trade Policy - - - - - - - - - - - - - - - - - - NAFTA and Inter-American Trade Monitor, vol. 1, #15 September 5, 1994 - - - - - - - - - - - - - - - - - - HEADLINES NAFTA'S FIRST SIX MONTHS MEXICO REVISES INTELLECTUAL PROPERTY LAW CARIBBEAN FOOD SECUTIRY THREATENED BY NAFTA FAST TRACK PUSH WEAKENS LABOR, ENVIRONMENTAL PROTECTIONS MEXICAN ELECTION IMPACT ON TRADE TRADE AND ENVIRONMENTAL ISSUES RESOURCES/EVENTS - - - - - - - - - - - - - - - - - - NAFTA'S FIRST SIX MONTHS "I hate to say 'We told you so' but the fact is, we did," said US Commerce Secretary Ron Brown, praising the first six months of NAFTA. According to Brown, NAFTA has produced strong export growth throughout North America and is "living up to its promise." Economist Thea Lee of the labor-backed Economic Policy Institute was not convinced. "Our imports from Mexico rose faster than our exports to Mexico in the first six months," said Lee. "I'm a little bit puzzled as to why they are selling this as a big success story." Commerce Department statistics show the US trade deficit with Canada growing, the US trade surplus with Mexico shrinking, and the overall US trade deficit within North America soaring from $478 million to $1 billion between May and June. Commerce Department officials estimate that the US will have its second highest foreign trade deficit ever in 1994. NAFTA boosters claim that each billion dollars in new exports creates 20,000 new jobs. The AFL-CIO says that "A closer look at the trade data ... indicates that some industries will gain and some will lose as a result of NAFTA. The restructuring of the U.S. economy due to increases in North American trade will cause substantial job loss in the 'loser' industries." Through June, 167 companies with 23,734 workers had asked for worker assistance due to job losses attributed to NAFTA, but the US Labor Department said that the total number of affected workers will be less than 15,000 for the full year. Most of the companies losing jobs are small manufacturers producing low- tech parts and components or apparel. NAFTA proponents say that such companies and workers are in jeopardy as long as world trade expands, regardless of NAFTA. US exports to Canada and Mexico are growing, accounting for 52 percent of all US export growth. US exports to Canada are up by ten percent and exports to Mexico are up by 17 percent. Texas has seen greatly increased trade because of NAFTA, generating enthusiasm for the pact, while the negative impact of layoffs seems to be felt further north. In addition to increased trade, Texas has benefited from the siting of the North American Development Bank in San Antonio, which is expected to bring lawyers, financiers, environmental consultants, scientists, and support staff to San Antonio to administer an estimated $6 billion in border environmental cleanup projects over the next decade. In Mexico, consumers and much of the Mexican business community remain positive about NAFTA, but small business owners disagree. Mexican consumers' enthusiastic response to imported goods has driven Mexico's trade deficit up by $2 billion to $7 billion. Some NAFTA opponents have resorted to boycotts, threats, arson, hijacking and thefts to scare US competitors out of the marketplace. Dairy products and high fructose corn sugar have been particular targets of opposition to exports. Jobless rates in Mexican border states are rising, with unemployment in Chihuahua state growing 5.7 percent since January 1. Interior states are aggressively seeking NAFTA business. Hidalgo, for example, touts its recent infrastructure improvements and wages even lower than those in maquilas close to the border. Source: "Nancy Dunne and Philip Gawith, "Washington Hails Nafta as Success," FINANCIAL TIMES, 8/19/94; Peter Behr, "NAFTAmath: A Texas-Sized Surge in Trade; Six Months After Treaty's Enactment, Booming Sales to Mexico Overshadow U.S. Job Losses," WASHINGTON POST, 8/21/94; Michelle Mittelstadt, "NAFTA Effects," ASSOCIATED PRESS, 8/19/94; Todd Roberson, "Honeymoon Over, Mexico Awakes to NAFTA Reality," WASHINGTON POST, 8/5/94; John M. Nagel, "Interior States in Mexico Pursue Fruits of Free Trade," JOURNAL OF COMMERCE, 8/18/94 - - - - - - - - - - - - - - - - - - MEXICO REVISES INTELLECTUAL PROPERTY LAW A comprehensive revision of Mexico's Law of Development and Protection of Industrial Property will take effect on October 1, including changes in trade mark, patent, commercial sign, and industrial design registration. The changes represent adjustments to comply with NAFTA provisions on intellectual property. The biggest effect will come in provisions making enforcement of intellectual property rights easier. Responsibility for administering the new law has been moved to a strengthened Instituto Mexicano de Propiedad Industrial (IMPI), from the Secretariat of Commerce and Industrial Development (SECOFI). The IMPI's enforcement powers will include injunctive relief and the authority to seize goods and equipment. The burden of proof in infringement cases has shifted from the holder of property rights to the person presumed to be infringing on existing industrial property rights. Source: "Intellectual Property Law Revised;" Geraldo Olca and Gary Doyle, "Mexico Advances Important Intellectual Property Protections," INTER-AMERICAN TRADE AND INVESTMENT LAW, 8/12/94; John M. Nagel, "Mexico Alters Law on Copyrights to Adjust to Nafta," JOURNAL OF COMMERCE, 8/19/94 - - - - - - - - - - - - - - - - - - CARIBBEAN FOOD SECURITY THREATENED BY NAFTA According to the Caribbean Agricultural Research and Development Institute (CARDI), regional membership in NAFTA would threaten the Caribbean's agricultural sectors. In a paper entitled "The NAFTA Challenge - Sectoral Impact," agricultural economist Edward Evans and CARDI director Hayden Blades point out that the small size of the Caribbean's arable land and its small-holding system of production make it particularly vulnerable to NAFTA and GATT impacts. Because Caribbean governments cannot afford to subsidize local agriculture, protection for small producers has come in the form of tariffs on agricultural imports. These tariffs have already been cut by structural adjustment programs. Further cuts will lead to higher food import bills for the region. Source: Sheila Rampersad, "NAFTA Threatens Region's Food Security," IPS, 8/17/94 - - - - - - - - - - - - - - - - - - FAST TRACK PUSH WEAKENS LABOR, ENVIRONMENTAL PROTECTIONS As US President Bill Clinton pushes for fast-track authorization for new trade deals and for GATT approval, his administration is backing down on legislative language including labor and environmental protection in future deals. Some Democrats object to the weakening of such protection, while many Republicans would like to see all labor and environmental protection language stricken. At the same time, new fast-track language orders the Administration to strive for specific objectives such as "vigorous and effective disciplines on subsidies practices with respect to civil aircraft products." Liberal Democrats and the AFL-CIO may mount a full-scale campaign in opposition to the fast-track legislation, now that labor rights have been negotiated away to gain Republican support. Garment unions have pushed for a change in origin rules for apparel, but clothing retailers' success in keeping the change out of the Senate version of the fast-track legislation may mean that garment unions will also back a full-scale campaign against fast-track. Meanwhile, the New York-based Human Rights Watch sent a letter to US Trade Representative Mickey Kantor, asking that any Chile Free Trade Agreement include an explicit pledge to respect the American Convention on Human Rights and a mechanism for adjudication of human rights complaints. Source: Nancy Dunne, "Clinton Pulls Out the Stops for Trade Deal Fast-Track," FINANCIAL TIMES, 8/25/94; John Maggs, "Fast- Track Compromise in Danger of Collapse," JOURNAL OF COMMERCE, 8/18/94; "Include Human Rights in Trade Talks, Group Urges," IPS, 8/29/94 - - - - - - - - - - - - - - - - - - MEXICAN ELECTION IMPACT ON TRADE As the election of Ernesto Zedillo and a majority win in both houses of congress solidified the ruling Institutional Revolutionary Party (PRI) hold on power in Mexico, many private economists forecast increased growth, bolstered by increasing public and foreign investment. Support for current trade policies will continue, with Trade Minister Jaime Serra Puche, a friend of Zedillo's from their days at Yale University, expected to play a major role in the new administration. Zedillo's economic program is expected to focus on the microeconomy, as he maintains that macroeconomic reform (particularly in the form of low inflation, balanced budgets, and privatization) has been accomplished. Zedillo is expected to sell off any state-run ports, railroads, and anything else that wasn't sold under his predecessor, and even to open Petroleos Mexicanos, the state-owned oil company, to foreign investment. In the immediate aftermath of the election, Mexican stocks surged to a new six-month high on August 22. US and Mexican analysts and brokers welcomed Zedillo's election and PRI's continuing hold on power. Source: Stephen Fidler and Damian Fraser, "Economy Set to Pick Up Tempo;" Damian Fraser, "Mexico's PRI to Gain Strong Grip on Congress," FINANCIAL TIMES, 8/24/94; Paul B. Carroll, Craig Torres and Dianne Solis, "Zedillo to Tap Team of U.S.-Educated Advisers as He Shifts Focus to Microeconomic Problems," WALL STREET JOURNAL, 8/23/94; Stephen Fidler and Damian Fraser, "Victorious Zedillo Aims to Calm Tensions Over Mexican Election;" Ted Bardacke, "Stocks Rise But Caution Sounded," FINANCIAL TIMES, 8/23/94; "Stock Market Shines After PRI Triumph," IPS, 8/29/94 - - - - - - - - - - - - - - - - - - TRADE AND ENVIRONMENTAL ISSUES Latin American environmentalists and some political leaders noted a variety of environmental and health issues posed by growing international trade. In Bolivia, government officials expressed concern over industrial mills' import of more than 120,000 tons of contaminated but cheap German wheat. Tests by the Bolivian National Institute of Health Laboratories found that the wheat "does not comply with the required quality due to the presence of a series of foreign agents within the grain," according to National Food Security Council Secretary Ramon Escobar, who also said that an additional 40,000 tons of the same kind of wheat are now in the Chilean port of Arica, in transit to Bolivia. The total wheat import makes up 40 percent of Bolivia's yearly consumption, and angered both local wheat producers, who cannot compete with the extremely low price, and the United States, which reduced its wheat donations. Bolivian environmentalists, noting that mineral wastes are regularly imported from Germany and other European nations, said that Bolivia is becoming a garbage dump for industrial countries. On August 17, following three toxic alerts in and around Chile in less than two weeks, Greenpeace Latin America urged all governments in the region to take steps to ban the import of toxic wastes. The alerts included a late July discovery that Chile was the port of entry to Bolivia for a cargo of antimony bound from Germany to Bolivia, an August 4 order from the Environmental Health Service to return to Canada a cargo of 20 tons of crude selenium shipped to Chile without proper authorization, and a notice by Greenpeace to the governments of Chile, Ecuador, and Peru that a cargo of dangerous industrial wastes rejected by Colombia might be headed for their ports. Source: "Mills Import Contaminated Wheat," IPS, 8/18/94; "Chile en el Centro de Una Guerra Quimica Contra los Paises en Desarrollo," "Greenpeace Demanda Medidas Urgentes Para Hacer Frente A Intensificacion del Trafico de Desechos Peligrosos," GREENPEACE, 8/17/94 - - - - - - - - - - - - - - - - - - RESOURCES/EVENTS Symposium: Economic Integration in the Western Hemisphere, June 7-9, 1995, Costa Rica. Sponsored by International Agricultural Trade Research Consortium and Inter-American Institute for Cooperation on Agriculture. Contact Laura Bipes, Administrative Director, Department of Agriculture and Applied Economics, University of Minnesota, 1994 Buford Avenue, St. Paul, MN 55108. Telephone: 612-625-1757 - - - - - - - - - - - - - - - - - - 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. - - - - - - - - - - - - - - - - - - For more information about the Institute for Agriculture and Trade Policy, send email to iatp-info@igc.apc.org. - - - - - - - - - - - - - - - - - - Produced by: Mary C. Turck, Institute for Agriculture & Trade Policy, 1313 Fifth St. SE, Suite #303, Minneapolis, MN 55414- 1546 USA. Tel: (612) 379-5980, Fax: (612) 379-5982, email: mturck@igc.apc.org