From iatp@igc.apc.org Date: 26 Sep 94 06:06 PDT From: IATP Reply to: "Conference trade.news" To: "Recipients of conference trade.news" Newsgroups: trade.news Subject: NAFTA & Inter-Am Monitor Produced by the Institute for Agriculture and Trade Policy - - - - - - - - - - - - - - - - - - NAFTA and Inter-American Trade Monitor, vol. 1, #18 September 26, 1994 - - - - - - - - - - - - - - - - - - HEADLINES NISSAN TO EXPORT FROM MEXICO TO US NAFTA LABOR HEARING STEELWORKERS ORGANIZE NAFTA WATCH QUEBEC SEPARATISTS ON TRADE CHILE CONCERNED AS CLINTON DROPS FAST TRACK LATIN AMERICAN FREE TRADE NOTES BRAZIL UPDATE RESOURCES/EVENTS - - - - - - - - - - - - - - - - - - NISSAN TO EXPORT FROM MEXICO TO US Nissan Motor Company will begin making 1995 Sentra sedans at its Aguascalientes plant in Mexico next year for export to the US. About 20,000 of 140,000 Sentras expected to be sold in the US in 1995 will be made in Mexico, with the Nissan plant in Smyrna, Tennessee building the other 120,000 and 35,000 200SX coupes and 295000 pickup trucks and Altima sedans. The imports from Mexico will replace this year's imports from Japan. General Motors, Ford, Chrysler, and Volkswagen also build cars in Mexico for export to the US. Source: "Mexico Exports for Nissan," NEW YORK TIMES, 9/15/94 - - - - - - - - - - - - - - - - - - NAFTA LABOR HEARING Recently filed complaints and a September 12 hearing have focused attention on the North American Agreement on Labor Cooperation (NAALC), one of two side agreements to NAFTA. The August 16 complaint filed by US and Mexican human rights organizations charges Sony with violating Mexican labor laws and the Mexican government with failure to enforce those laws. The first hearing, by the National Administrative Office in Washington, DC, reviewed complaints filed last February by the Teamsters and the United Electrical, Radio and Machine Workers of America (UE), alleging that General Electric and Honeywell fired workers at Mexican plants for efforts to organize a union affiliated with the Authentic Labor Front (FAT). FAT is an independent union. Most Mexican workers who have any union membership are represented by pro- government unions in the Confederacion de Trabajadores Mexicanos. NAALC provides for establishment of National Administrative Offices (NAO) within each country. The NAO will hear complaints on labor law matters arising in another country and may request consultation with another country's NAO. If consultations do not resolve problems, the next step is appointment of an evaluation committee of experts (ECE). Penalties -- fines or trade sanctions --require several further steps, and are limited to narrowly defined types of cases. Freedom of association and rights to organize, to collectively bargain, and to strike are specifically excluded from ECE jurisdiction, so the complaint filed by the Teamsters and GE could only be addressed by consultation. UE spokesperson Robin Alexander, called the lack of sanction authority "deeply troubling," noting that "what that really leaves the NAO with is the ability to assert moral pressure and cast some light on violations by U.S. corporations." The amount of light shed may be affected by the NAO's prohibition of radio and television coverage of the hearing and by holding the hearing in Washington, DC, far from the location of witnesses. Source: Edward A. Brill and Stephanie L. Oratz, "Labor Accord Put to the Test," NATIONAL LAW JOURNAL, 9/19/94; Marianne Lavelle, "Labor's Charges Test NAFTA Rules in Mexico," NATIONAL LAW JOURNAL, 9/19/94; Jorge A. Banales, "NAFTA Labor Tools Tested," 9/12/94 - - - - - - - - - - - - - - - - - - STEELWORKERS ORGANIZE NAFTA WATCH Members of the United Steelworkers voted at their convention to establish a committee to monitor the effects of NAFTA and to disseminate information on transfer of jobs from Canada and the US to Mexico. the Steelworkers will work with the AFL-CIO in monitoring NAFTA. The convention also called for the abolition of the Canada-US Free Trade Agreement , and maintained that Canadian steel exports to the US have increased "so that Canadian steel producers might maintain customers who moved form Canada to the U.S." Source: "Steelworkers to Establish Committee to Monitor North American Free Trade Pact," BNA DAILY LABOR REPORT, 9/1/94 - - - - - - - - - - - - - - - - - - QUEBEC SEPARATISTS ON TRADE While Quebec's separatist Parti Quebcois (PQ) supports continued membership in NAFTA and GATT by an independent Quebec, they see independence generating a more trade with the rest of Canada. According to PQ's Rita Dionne-Marsolais, "The trade barriers between Quebec and the rest of Canada are bigger than the barriers between Quebec and the world," and independence would mean a better trade deal for Quebec. Quebec's $17 billion economy is made up mostly of small to mid-sized enterprises. Source: Milan Ruzicka, "Quebec Separatists Foresee Economic Prosperity," JOURNAL OF COMMERCE, 9/7/94 - - - - - - - - - - - - - - - - - - CHILE CONCERNED AS CLINTON DROPS FAST TRACK Chilean officials and business leaders are concerned that the Clinton administration's acquiescence to the US House of Representatives' dropping of fast-track free trade authorization from the GATT bill will kill Chile's hope of beginning negotiation this year for a bilateral pact with the US or for Chilean entry to NAFTA. Fast-track legislation would not be re-introduced until at least April, 1995. Chilean Finance Minister Eduardo Aninat criticized the move, saying "the region is being put off here as in everything else." Aninat predicted that the December 9-10 summit in Miami will be less important because of the failure of fast-track authorization, since free trade was one of the central topics. US officials said that loss of fast-track negotiating authority would not delay the beginning of negotiations. US Trade Representative Mickey Kantor said that negotiations will begin, but that the US has not decided whether to pursue a bilateral agreement or NAFTA accession for Chile. Source: "Worried About Prospects of Free Trade Pact with U.S.," IPS, 9/14/94; "Chilean Official: U.S. Delay in Nafta Affects Many," XINHUA, 9/14/94; "U.S. Official Says Loss of 'Fast Track' Will Not Delay Chile Trade Talks," AFP-EXTEL NEWS, 9/15/94; "U.S. Reassures Chile of Commitment to Free Trade Deal, U.S. Officials Say," BNA, 9/16/94 - - - - - - - - - - - - - - - - - - LATIN AMERICAN FREE TRADE NOTES Brazil's new Finance Minister Ciro Gomes cut tariffs on 13,000 goods from 20 percent to 14 percent, excluding only cars, computers, and factory machinery. Auto tariffs will drop from 30 percent to 20 percent, opening the market to low-cost Asian cars. Despite criticism from the business sector, the government appeared determined to take the lead in compliance with the Common External Tariff agreed upon by the Mercosur nations. "The business community has always talked about an open market. We'll see how they do when faced with international competition," said Gomes. The Brazilian government also created a commission to implement Mercosur and hosted a three-day meeting of Mercosur members -- Paraguay, Uruguay, Argentina, and Brazil -- in Fortaleza to discuss increased maritime commerce within the bloc. Chile has encountered obstacles in its negotiation with Mercosur for a joint agreement by the end of 1994, as Chile expressed opposition to required tariff reductions. Conversations between Chile and Mercosur will resume in October in Montevideo. US toy manufacturer Mattel, announced plans to invest $25 million in Argentina as part of a plan to expand in Mercosur countries. Mattel earns one billion dollars annually from worldwide sales of Barbie dolls and another $2.7 billion from Disney characters. Over the past four years, toy imports in Argentina have risen to $120 million and forced the closing of 120 of 200 local toy companies, cutting employment in the sector from 12,000 to 3,000. Bolivia and Mexico signed a free trade accord in early September, providing for elimination of 98 percent of all tariffs over a 10 year period and of all tariffs over 15 years. Trade between the two countries is expected to rise from $20 million to $50 million annually under the pact. Source: Arnaldo Cesar, "Business Sector Hurt by Lower Tariffs," IPS, 9/12/94; James Brooke, "Brazil Cuts Its Tariffs on Many Goods," NEW YORK TIMES, 9/12/94; "Governo Cria Commissao de Comercio do Mercosul," IBASE, 9/16/94; "Mercosul Quer Incentivar Comercio Por Via Maritima," IBASE, 9/16/94; "Chile Faces First Obstacles to Mercosur Entrance," IPS, 9/15/94; "Barbie Doll and Mickey Mouse Move South," IPS, 9/12/94; "Mexico and Bolivia Sign Free Trade Accord," IPS, 9/10/94; "Businesses Welcome New Free Trade Pact," IPS, 9/9/94 - - - - - - - - - - - - - - - - - - BRAZIL UPDATE The Brazilian government continued to express optimism over falling inflation rates, despite the 11.86 percent cumulative inflation for July and August. The head of the Brazilian Institute of Geography and Statistics (BIGS) forecast lower inflation for September, saying that "from now on we will be floating in a sea of tranquillity." An official in the US Federal Reserve System expressed skepticism, predicting economic difficulty by late November. "If it's such a great plan, why didn't they introduce it in January instead of waiting until mid- year?" asked the US official. "The answer is that it would have run out of steam by now and people would be looking for somebody's head to chop off." "Black September," as the month of labor negotiations is traditionally known in Brazil, brought a metal-workers' strike and talk of strikes by other sectors. New Finance Minister Ciro Gomes acted quickly to assert government control over inflation, refusing to approve the first contract accord reached by auto makers and workers. On September 19, 52,000 of the 77,000 workers on strike returned in exchange for a one-time salary bonus, while workers in the crucial auto-parts industry remained out. Gomes, formerly governor of the northeastern state of Ceara, was named to replace Rubens Ricupero as Finance Minister after the latter's indiscreet comments to the press caused his resignation. Ricupero had boasted that the government was manipulating inflation figures to bolster the ruling party's election chances. Some were surprised by the naming of a politician rather than a member of the team that designed the nation's economic plan to the post, but business leaders spoke positively about the new minister and forecast an early return to normalcy. The Brazilian stock market has risen steadily all year, though money managers are still cautious, waiting for solid results from the government's new economic plan and the new currency introduced on July 1. As Brazil looks to the October 3 presidential election, former Finance Minister and Social Democrat candidate Fernando Henrique Cardoso maintains a lead in the polls over Workers Party candidate Luis Inacio Lula da Silva. If none of the ten candidates wins a majority on the first round, a runoff election will be held on November 15. The government announced that it will send the army into five of Brazil's 26 states to keep peace during the election. Source: Mario Osava, "Young Politician Named Finance Minister After Scandal," IPS, 9/5/94; Arnaldo Cesar, "High Inflation Worries Government," IPS, 9/6/94; Arnaldo Cesar, "September Strikes Threaten Stabilization Plan," IPS, 9/14/94; "Some Auto Workers Strike in Brazil Regarding Pay," WALL STREET JOURNAL, 9/13/94; "Workers Return to Work with Salary Bonus," IPS, 9/20/94; Anthony Ramirez, "Brazil Stocks Fly High, But the Word Is Caution," NEW YORK TIMES, 9/10/94; James Brooke, "Taming of Inflation in Brazil Buoys Centrist Presidential Hopeful in Polls," NEW YORK TIMES, 9/14/94; "Estados Intervenidos Por Ejercito," SERVIDATOS, 9/20/94; "International Banks Help Rig Brazilian Elections," WEEKLY NEWS UPDATE ON THE AMERICAS, 9/25/94 - - - - - - - - - - - - - - - - - - RESOURCES/EVENTS "International Organization," vol. 48, No. 3, Summer 1994. WORLD PEACE FOUNDATION, UNIVERSITY OF SOUTHERN CALIFORNIA. Two articles in this issue focus on trade issues: "The origins and sustainability of Mexico's free trade policy," by Manuel Pastor and Carol Wise and "Free trade, fair trade, strategic trade, and protectionism in the U.S. Congress, 1987-88" by Stanley D. Nollen and Dennis P. Quinn. Order from MIT Press, Cambridge, MA 02142. $35/year; $22 for current issue; $11 for back issue. - - - - - - - - - - - - - - - - - - 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