From iatp@igc.apc.org Date: 12 Sep 94 19:31 PDT From: IATP Reply to: "Conference trade.news" To: "Recipients of conference trade.news" Newsgroups: trade.news Subject: NAFTA & Inter-Am Monitor 9/12/94 Produced by the Institute for Agriculture and Trade Policy - - - - - - - - - - - - - - - - - - NAFTA and Inter-American Trade Monitor, vol. 1, #16 September 12, 1994 - - - - - - - - - - - - - - - - - - HEADLINES CORRECTION RE AUTO WORKERS' WAGES FORD STRIKE ENDS MAQUILA STRIKE NAFTA LABOR BODY LACKS EXECUTIVE CHICKEN OPERATION HELPED, HINDERED BY NAFTA MEXICAN BANKER DISAPPEARS TO AVOID ARREST MEXICO'S MILK WAR BRAZIL: REAL, INFLATION, AND POLITICS TARIFF REDUCTION PLAN PROTESTED CARIBBEAN WORKERS MEET - - - - - - - - - - - - - - - - - - CORRECTION RE AUTO WORKERS' WAGES IN MEXICO In the July 11, 1994 issue of the NAFTA AND INTER-AMERICAN TRADE MONITOR, we summarized articles from the WALL STREET JOURNAL (6/29/94) and the JOURNAL OF COMMERCE (6/27/94) that claimed that the average Ford worker in Hermosillo, Mexico, earns $6.35 per hour in wages and benefits. According to information circulated by the Coordinadora de Organizaciones Empresariales de Comercio Exterior (COACE), and furnished to us by the Resource Center of the Americas, average hourly compensation paid by major automotive manufacturers in Mexico, as of January 1993, was $2.61 per hour, with an additional $1.10 in fringe benefits bringing the total compensation to $3.71 per hour -- slightly more than half of the $6.35 claimed by the WALL STREET JOURNAL article. According to the Resource Center of the Americas, wages have not gone up since then, when measured against the dollar, and pay at Ford's Hermosillo plant is not at the high end of the automotive sector, but ranges from $1.80-$2.15 per hour, not including benefits. - - - - - - - - - - - - - - - - - - FORD STRIKE ENDS AFTER PLANT CLOSING THREAT Ford workers at the Cuautitlan plant announced an indefinite work stoppage in early September, demanding the dismissal of their union's local executive committee, recognition of interim leadership selected by the workers and scheduling of free elections, reinstatement of union leaders fired four years ago, and an end to "too heavy workloads." Unrest at the Cuautitlan plant dates back to labor conflict of 1990, when one worker was killed and local union leaders were fired and replaced by others chosen by the official Mexican Workers Confederation (CTM), rather than by workers at the plant. After a two-day work stoppage, production.resumed Monday, September 5, as Ford Motor Company distributed a warning that it would close if workers continued to strike. Production of the Mercury Mystique and Ford Contour sedans began on August 15 at the Cuautitlan plant. Both cars use the new 4-cylinder engine produced at the company's Chihuahua plant, and are planned as major export vehicles. Source: "Ford Motor Company Labor Conflict," CENTRO DE REFLEXION Y ACCION LABORAL," 9/4/94; "Ford Begins Production of Two New Models," EL FINANCIERO, 8/22-28/94; "Mexican Ford Workers Update," FORD DEMOCRATIC WORKERS MOVEMENT, 9/7/94 - - - - - - - - - - - - - - - - - - MAQUILA STRIKE On July 20, 120 workers at Industrial Arcos maquiladora in Tijuana walked off their jobs, after five weeks of working without pay. The maquila is owned by the Mexican Leyva Osorio family, but workers say that many sewing machines are owned by Resource International of San Diego, which contracts with Arcos to produce knapsacks and other goods for the US market. The workers are formally represented by Mexico Moderno, an affiliate of the official union CROM (Regional Confederation of Mexican Workers.) CROM has locked the workers out of the facility and had signed a contract with the employer before the plant opened in 1992, before any workers were hired. Arcos workers were paid from $56.67 for a 50-hour week for seamstresses up to $130 for supervisors. They have formed a committee to stand guard 24 hours outside the plant to prevent equipment from being removed. CROM says that, despite deductions from worker pay, the company owes thousands of dollars to the Mexican Social Security. Source: Mary Tong, "Maquiladora Workers Strike," SUPPORT COMMITTEE FOR MAQUILADORA WORKERS, 8/15/94 - - - - - - - - - - - - - - - - - - NAFTA LABOR BODY LACKS EXECUTIVE The Nafta labor secretariat, to be based in Dallas, Texas, still remains without a chief executive. "What we're seeing is business as usual," complained Jaime Martinez, secretary- treasurer of the International Union of Electronics, Electrical, Salaried, Machine and Furniture Workers AFL-CIO for District 11 in San Antonio, Texas. "The side agreements [to Nafta] have no enforcement, no teeth whatsoever." Mexican officials insist that the head of the labor secretariat and anyone working for the secretariat must permanently sever all ties to labor organizations. US and Canadian officials point out that this might require someone not just to take a leave of absence, but to give up 20 years of pensionable service in order to work for the labor secretariat. US government officials say that the Nafta provisions are working, as evidenced by the filing of three complaints with the US Department of Labor. The first two complaints are scheduled for hearing on September 12 in Washington, DC, and the third -- jointly filed by US and Mexican labor interests against Sony's plant in Nuevo Laredo -- will be heard late this year or early in 1995. The Sony complaint is the first joint filing by US and Mexican organizations, and focuses on allegations that Sony violated Mexican labor laws and tried to stifle organizing efforts at the plant. The two earlier complaints allege that General Electric fired union organizers at a plant in Ciudad Juarez and that Honeywell fired organizers at a plant in Chihuahua. Workers at the General Electric plant rejected union representation by a vote of 914-160 in August of this year. The US United Electrical, Radio and Machine Workers union (UE) assisted the organizing efforts of Stimahcs, a metal workers affiliate of Mexico's Authentic Labor Front. UE said that GE disrupted the election process by threatening to close the plant if the union was voted in, but GE officials deny the charges. Source: Kevin G. Hall, "Nafta Labor Body Still Lacks Executive," JOURNAL OF COMMERCE, 8/24/94; "Labor Groups File Joint Complaint Against Sony," EL FINANCIERO, 8/22-28/94; John M. Nagel, "Complaint Against Sony Called Warning to Companies," JOURNAL OF COMMERCE, 8/26/94; Tim Shorrock, "Workers at GE Plant in Mexico Reject Union," JOURNAL OF COMMERCE, 8/29/94 - - - - - - - - - - - - - - - - - - CHICKEN OPERATION HELPED, HINDERED BY NAFTA Avicola las Americas, with 1.5 million chickens, a bank, a feed mill, 300 employees, thousands of acres of land, 1,000 head of cattle, and peacocks and fighting bulls, is one of Mexico's largest egg producers. Much of the grain needed to feed Avicola's chickens is imported from the US. Avicola itself mills the feed with the aid of a computerized batching system that mixes about 14 ingredients into 5,500 tons of feed monthly. Owned by the Camarena family, Avicola produces about 1.08 million eggs daily. Within 65 miles of its operation are 20-25 million layers producing 25 percent of all of Mexico's eggs. Avicola has a capacity to add another million chickens, but Hector Camarena says that imports have driven egg prices down below the cost of production. Camarena fears that NAFTA's phase-out of tariffs on eggs over the next 10 years will keep egg prices low. Source: Charles House, "Mexican Layer Operation Succeeds with Feed from the North," FEEDSTUFFS, 8/1/94 - - - - - - - - - - - - - - - - - - MEXICAN BANKER DISAPPEARS TO AVOID ARREST Carlos Cabal Peniche, a young Mexican bank director known for his bold business moves to acquire US food companies, is believed to have fled the country after a warrant was issued for his arrest on charges of fraudulently lending himself $700 million. Cabal is charged with using a complicated shell game to get the money that enabled him to buy several large companies, including Del Monte Fresh Produce Company. Cabal has a pending deal to buy Del Monte Foods canned food business as well. The government took over Cabal's Cremi-Union financial group, which includes the fourth largest bank in Mexico. Cabal was considered a symbol of a new breed of Mexican business leaders poised to take advantage of NAFTA. While Cabal escaped arrest, nine other bank officials in Mexico were detained in connection with the case, characterized as the worst financial scandal in 20 years. Source: Anthony DePalma, "Mexican Banker Disappears After His Arrest is Ordered," NEW YORK TIMES, 9/7/94 - - - - - - - - - - - - - - - - - - MEXICO'S MILK WAR As US milk flooded across the border with the advent of NAFTA, angry Mexican dairy producers complain that US health regulations prevent them from sending their milk to the US and that US milk is unfair competition. In recent weeks, trucks delivering US dairy products have been trashed and burned and some drivers have been beaten. Chicago-based Price dairies charge that damages from arson to their warehouse and three delivery trucks in July resulted in nearly $100,000 in damages. Borden's and Farmer's dairy employees have also been the targets of attacks on both property and employees. The Chihuahua State Attorney General is investigating death threats against milk delivery drivers for US dairies. Mexican imports of US dairy products are expected to grow by 200 percent during the 15-year introductory period for NAFTA. The state of Chihuahua, where most of the violence has occurred, imports more than 17,000 gallons of US milk daily, amounting to $11 million yearly. More than half of that amount goes to Ciudad Juarez. Source: Allen R. Myerson, "New Limits Are Seen to Freer Trade," NEW YORK TIMES, 9/6/94; Talli Nauman, "'Milk War' Heats Up in Juarez," EL FINANCIERO, 8/22-28/94 - - - - - - - - - - - - - - - - - - BRAZIL: REAL, INFLATION, AND POLITICS The introduction of the real currency and accompanying anti- inflation measures gave a boost to the presidential campaign of PDSB (Brazilian Party of Social Democracy) candidate Enrique Cardoso, who surged ahead of Workers' Party candidate Luis Inacio Lula da Silva in the polls for the first time. When government figures showed continuing inflation in excess of the predicted 4.5 percent maximum, government spokespersons blamed August and July's high figures on the last gasp of the cruzeiro, on rent increases facilitated by the conversion from cruzeiro to real, on frosts in the coffee-growing regions, and on faulty economic indices. Then Finance and Housing Minister Rubens Ricupero was caught on an open microphone, boasting that he was Cardoso's biggest vote-getter. "I have no scruples," Ricupero said, unaware that his words were being broadcast over satellite receivers throughout the country. "What is good, we take advantage of. What is bad, we hide." Ricupero resigned on September 3, two days after the broadcast. Electoral officials were already investigating charges that President Itamar Franco's government was helping Cardoso's campaign. James Carville, a strategist for US president Bill Clinton's 1992 campaign and a current White House adviser, is also providing Cardoso with consulting services, at a reported cost of $1 million, according to Washington's Counterpunch magazine. Bank employees and oil workers are among nearly one million workers scheduled to negotiate new salary agreements in September. The 600,000 bank workers plan to demand a 119 percent increase to cover inflation over the past year, and workers in the oil industry are also asking for more than a 100 percent increase. Work stoppages in both sectors would severely affect the government's economic stabilization plan. Both oil and bank workers have close links with the Workers' Organization (CUT), which backs PT's Lula for president. Source: "Inflation May Force Changes in Economic Plan," IPS, 8/30/94; "High Inflation Rate Alarms Officials," IPS, 8/27/94; "Official Bloopers Rock Anti-Lula Campaign," WEEKLY NEWS UPDATE ON THE AMERICAS, 9/4/94; Arnaldo Cesar, "Workers Not Ready for Strikes in September," IPS, 8/18/94 - - - - - - - - - - - - - - - - - - TARIFF REDUCTION PLAN PROTESTED The Clinton Administration's plan to eliminate some tariffs earlier than the five to 15 year time frame set out in the NAFTA agreement has met with protest from import-sensitive industries and others. During the NAFTA debate, the administration promised some industries that they would continue to be protected. Now they feel betrayed by US Trade Representative Mickey Kantor's proposal for early elimination of tariffs. Protests were voiced to the International Trade Commission this summer. At Kantor's request, the ITC has been preparing a report on the impact of elimination of 160 tariff schedule subheadings including appliances; cheese, produce, nuts, juice and wine; chemicals and plastic; fabric, clothing and footwear; and wood, stone, mineral, or glass articles. Source: "Clinton's NAFTA Acceleration Betrays Businesses' Trust," BUSINESS WIRE, 8/22/94 - - - - - - - - - - - - - - - - - - CARIBBEAN WORKERS MEET In a move toward regional integration, governmental and non- governmental organizations from 31 Caribbean countries met at an Assembly of Caribbean People hosted in Trinidad and Tobago by the Oilfields Workers Trade Union during the weekend of August 19. The conference, called "A Message of Urgency: Towards a People's Agenda for the Sovereignty of the Region and the Welfare of the People," focused on crises in Haiti and Cuba as well as on NAFTA , GATT, free trade, and models of development. Source: Sheila Rampersad, "Caribbean Workers Chart Own Path to Development," IPS, 8/19/94 - - - - - - - - - - - - - - - - - - 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