NAFTA Monitor Wednesday, May 11, 1994 Volume 1, Number 20 ____________________________________________________ Headlines: GEPHARDT INTRODUCES LEGISLATION TO EXPAND NAFTA TO CHILE NEW ZEALAND, MEXICO SIGN TRADE PACT U.S. ENDORSES OBSERVERS FOR MEXICAN ELECTION U.S.-MEXICO BORDER REGION TRYING TO ATTRACT BUSINESS HONDA PLANS AUTO PLANT IN MEXICO RESOURCES ____________________________________________________ GEPHARDT INTRODUCES LEGISLATION TO EXPAND NAFTA TO CHILE House Majority Leader Richard Gephardt (D- Missouri) introduced legislation Monday that would allow the White House to negotiate a free trade pact with Chile under fast-track rules as long as the accord protects workers' rights and the environment. Identical legislation was introduced in the Senate by Senator Harris Wofford (D- Pennsylvania). "We have the opportunity to reach a good agreement with Chile, " Gephardt said. "But before we sit down at the bargaining table, we have the obligation to consider what a 'good agreement' really means, and we have the right to say to the people of Chile: we'll start a new trade partnership but not if it means trading away our values. Not if it means lowering our labor and environmental standards, instead of raising yours." Both Gephardt and Wofford voted against NAFTA. In a letter to Gephardt, Sierra Club Chair Michael McCloskey welcomed the legislation, saying it "will enhance the prospects of an environmentally sound agreement between the United States and Chile." Chilean Finance Minister Eduardo Aninat announced Tuesday in Washington that preliminary negotiations to join NAFTA or to form a bilateral trade pact with the U.S. will begin May 25. The two sides hope to sign an agreement by March 1995. What significance the environmental issue will play remains to be seen. Just last month, after U.S. Environmental Protection Agency officials outlined the kind of reforms Chile would need to make in order to join NAFTA, Chile Foreign Ministry officials said Chile was considering dropping its effort to join NAFTA and focusing instead on establishing free trade pacts with Europe, Asia and throughout Latin America. "We're light years away from environmental standards in the U.S.," Foreign Ministry officials told the newspaper, LA EPOCA. Chile is slated to become the first nation to join NAFTA, but other Western Hemisphere nations are eager to follow suit. Costa Rican President Jose Maria Figueres, who was inaugurated this week, pledged to expand Costa Rica's ties to trading blocs elsewhere and said he hoped Central American nations could eventually join NAFTA. Sources: "Rep. Gephardt Introduces Legislation to Negotiate Free Trade Pact With Chile," May 10, 1994; "Moves Toward Talks With USA on Bilateral Trade Accord Or Joining NAFTA," BRITISH BROADCASTING SERVICE SUMMARY OF WORLD BROADCASTS, May 10, 1994; "Costa Rican President-elect Pledges Push for Central American Trade Ties," AGENCE FRANCE PRESSE May 7, 1994; John Maggs, "Chile Says US Demands Curb Interest in NAFTA," JOURNAL OF COMMERCE, April 29, 1994. ____________________________________________________ NEW ZEALAND, MEXICO SIGN TRADE PACT During last month's GATT signing ceremony in Morocco, New Zealand and Mexico representatives found the time to sign a bilateral trade and investment pact. The accord establishes a special Commerce and Investment Commission to examine obstacles to trade and investment between the two countries. The commission will also develop an information channel to disseminate statistics and information about trade rules. New Zealand downplayed the agreement, saying it did not address individual sectors and that it merely forms a framework for continued bilateral trade talks. New Zealand fears it will be shut out of the Mexican market because of NAFTA's preferential treatment to the U.S. and Canada. Source: Kevin G. Hall, "New Zealand, Mexico Take '1st Step' to Talks," JOURNAL OF COMMERCE, April 26, 1994. ____________________________________________________ U.S. ENDORSES OBSERVERS FOR MEXICAN ELECTION U.S. Secretary of State Warren Christopher encouraged the Mexican Congress to pass a proposal that would permit international monitoring of the August presidential election. "It would add to the credibility of the election if there were some international visitors," Christopher said Monday at the end of a two-day trip to Mexico City. Christopher, Attorney General Janet Reno and other top White House officials met with their Mexican counterparts on a variety of issues, including border development, environmental clean-up, and the fight against drug trafficking. Christopher acknowledged the problem of illegal Mexican immigration to the U.S. "We must work together under the umbrella of NAFTA with our Mexican counterparts to find ways to deal appropriately with this flood of illegal immigrants," he said. Sources: David Haskel, "Christopher Endorses Observers for Mexican Vote," REUTER, May 10, 1994; Doyle McManus, "U.S. Officials Due in Mexico to Lend Backing to Reformists," LOS ANGELES TIMES, May 9, 1994; Tim Vandenack, "Christopher Lauds 'Market' Democracies," UPI, May 9, 1994. ____________________________________________________ U.S.-MEXICO BORDER REGION TRYING TO ATTRACT BUSINESS San Diego Mayor Susan Golding will lead a delegation of California and Mexican business leaders on a two-week trip to Asia to promote the San Diego-Tijuana border region as ideal for foreign businesses eager to take advantage of NAFTA. The delegation will tout Tijuana's cheap labor and San Diego's infrastructure to foreign businesses. Some trade analysts contend that foreign investors are adopting a "wait-and-see" attitude to Tijuana as the city has suffered from assassinations, police corruption and increased drug trafficking in recent months. "Foreigners are quite concerned with making new investments in Tijuana and in Mexico in general. Money seems to be drying up," said Colleen Morton, vice president of the Institute of the Americas, a California think-tank. Meanwhile, in an incident that will not help Tijuana's image, a break in one of the city's main sewer lines last week has poured more than 12 million gallons of untreated waste into the Pacific Ocean. The spill closed a 15-mile stretch of beach from the Mexican border to Coronado, California. The Arizona-Sonora region is also trying to position itself to gain from NAFTA. Last month, Arizona hosted a conference of representatives from Mexico and U.S. states in hopes of establishing the region as a trade corridor for goods and services moving between western Mexico and the western U.S. and Canada. The states have created the Arizona-Sonora Joint Economic Development Plan to promote certain industries. A proposal to promote tourism on both sides of the border will be released later this month, with mining and transportation plans to follow. Sources: Chris Kraul, "Trade Mission May Have to Conduct Damage Control," LOS ANGELES TIMES, May 9, 1994; "Sewage Pipe Bursts in Mexico, Fouling Beaches in San Diego," NEW YORK TIMES, May 4, 1994; William H. Carlile, "Arizona, Sonora Positioned at Heart of 3- Nation Trade Flow," ARIZONA REPUBLIC, May 8, 1994. ____________________________________________________ HONDA PLANS AUTO PLANT IN MEXICO In a move aimed at increasing market opportunities under NAFTA, Honda Motor Company will invest $50 million in a new auto plant in Mexico this year. The company says the plant will export vehicles to other Latin American countries, but does not expect to export Mexican-made cars to the U.S. and Canada. Source: "Honda to Build Auto Plant in Mexico," YOMIURI NEWS SERVICE, May 10, 1994. ____________________________________________________ The following email services are offered by the Institute for Agriculture and Trade Policy: "trade.library" - a storehouse of trade related documents, including analyses, reports, fact sheets, White House transcripts ... etc. "trade.strategy" - an open discussion of trade issues and events "eai.news" - a regular bulletin summarizing the latest news in Latin American integration and development "susag.news" - a regular news bulletin pertaining to sustainable agriculture "susag.library" - longer documents, studies and analyses on sustainable agriculture "susag.calendar" - a calendar of events "env.biotech" - a news bulletin about biotechnology If you are on EcoNet/PeaceNet, you may access these services by going to the "conferences" section. If you are on another system and would like to be added to the e-mailing list for these services, send email to "kmander@igc.apc.org" with a note requesting to which lists you'd like to be added. NAFTA Monitor is produced by: Gigi DiGiacomo and Kai Mander Institute for Agriculture and Trade Policy (IATP) 1313 5th Street, SE, Suite 303 Minneapolis, MN 55414-1546 USA tel: (612) 379-5980 fax: (612) 379-5982 email: kmander@igc.apc.org ____________________________________________________