From iatp@igc.apc.orgSat Dec 16 10:44:04 1995 Date: Mon, 26 Jun 1995 15:11:33 -0700 (PDT) From: IATP To: Recipients of conference Subject: NAFTA & Inter-Am Trade Monitor 6/23 NAFTA & Inter-American Trade Monitor Produced by the Institute for Agriculture and Trade Policy June 23, 1995 Volume 2, Number 19 _________________________________________ Headlines: - CHILE, NAFTA, AND MERCOSUR - GOVERNMENT-ZAPATISTA TALKS CONTINUE - NAFTA ENVIRONMENTAL COMMISSION TO INVESTIGATE BIRD DEATHS - MEXICO NAFTA OFFICE FAULTS US LABOR PRACTICES - 50,000 U.S. WORKERS CLAIM JOB LOSS DUE TO NAFTA - BRAZIL, ARGENTINA CLASH OVER AUTO IMPORTS - WHEAT TRADE - INTER-AMERICAN DRUG TRADE _________________________________________ CHILE, NAFTA, AND MERCOSUR Formal negotiations for Chile's entrance to NAFTA began on June 7 in Canada, as about 100 organizations from the four countries (Chile, United States, Mexico, Canada) voiced their opposition to any agreement that fails to reflect labor, environmental and indigenous concerns in Chile and to protect its national sovereignty. Both U.S. President Clinton and House Speaker Newt Gingrich, the leader of the opposition, have voiced support for fast-track legislation to authorize Chile's entry to NAFTA by year's end. Republican opposition to inclusion of labor and environmental side agreements and some Democratic insistence on those provisions are expected to delay passage of the fast-track legislation. Chilean finance minister Eduardo Aninat warned that Chile is not willing to wait indefinitely. "If we don't have fast-track by early February, the whole process is probably doomed," said Aninat. Chile is also negotiating associate membership with the Mercosur free- trade area that includes Brazil, Argentina, Uruguay, and Paraguay, and has begun discussions for agreements with the European Union and with the Asian Pacific trade group. According to Chilean foreign minister Jos Miguel Insulza, Chile gives higher priority to joining Mercosur than to NAFTA membership. Insulza pointed out that Mercosur negotiations include "issues of physical integration," such as infrastructure development, opening Chile's Pacific ports to regional products, and circulation of individuals, especially skilled laborers. Chile's 1994 trade with Mercosur totaled $5.2 billion. The U.S.-based AFL-CIO and the Chilean CUT labor federations have joined forces to demand that worker rights be included in any trade pact reached. Chilean unions were smashed in the U.S.-backed 1973 military coup, with members and leaders suffering firing, jail, and execution. Although a civilian government replaced the military in 1990, Chile's labor code still bans any regional or national union organizations and strictly limits collective bargaining. Chilean business associations say that the labor law works fine and that collective bargaining, which currently covers only about 10 percent of Chilean workers, is not needed. The Chilean government would like to see union organization extended to seasonal workers in building, farming, and forestry, and advocates legalization of cross- company unions, a legal change adamantly opposed by business. Nancy Dunne, "Chile's Patience Wearing Thin Over NAFTA," FINANCIAL TIMES, June 13, 1995; Yvette Collymore, "NAFTA Entry Could Mean Another Star on U.S. Flag," INTERPRESS SERVICE, June 6, 1995; "Chile Juega Sus Cartas," SUCESOS, June 8, 1995; Fred J. Solowey, "A 'Chile' Reception to NAFTA's Extension," SOLIDARITY, May, 1995; "Unions, Who Needs Them?" THE ECONOMIST, May 13, 1995; Saul Ronzoni, "Minister Confirms Mercosur Priority Over NAFTA," INTERPRESS SERVICE, June 16, 1995; Ximena Souza, "Sin Fast Track No Se Concretara el Ingreso de Chile al TLC," SUCESOS, June 15, 1995. GOVERNMENT-ZAPATISTA TALKS CONTINUE In a five-day meeting that began on June 7, the Mexican government and EZLN (Zapatista National Liberation Army) continued discussions and agreed to meet again on July 4. The tentative agreement reached in May regarding creation of seven corridors for Zapatista settlement has not been approved in full by the EZLN after chad previously agreed to do. Government representatives continued to refuse to discuss national issues. The EZLN representatives insisted that poverty is a national problem, asked unsuccessfully for special attention to the status and problems of women, and called for inclusion of popular sectors in the dialogue. Clashes between the army and local protesters continued in Chiapas, with one dead and six wounded in a June 6 march, which followed four arrests in a June 4 protest. CONAI PRESS RELEASE, June 13, 1995; CHIAPAS BULLETIN NO. 13, June 20, 1995; Hermann Bellinghausen, "Las Diferencias Entre Gobierno y EZ Siguen Siendo Muchas: Tacho," LA JORNADA, 6/13/95. NAFTA ENVIRONMENTAL COMMISSION TO INVESTIGATE BIRD DEATHS More than 40,000 sandpipers, ducks, coots, and other migratory birds mysteriously died at the Silva Reservoir in the Mexican state of Guanajuato. The Mexican government first attributed the deaths to dumping of a pesticide called endosulfin, but ecologists said that many of the birds show no sign of endosulfan poisoning. Later, government environmental officials said that the cause was a large one-time dumping of red-dye colorants. Environmentalists suspect that the poisoning is due to chromium discharges into rivers feeding the reservoir by local industries, especially tanneries. After petitions by the U.S. National Audubon Society, the Mexican Center of Environmental Rights, and the Group of 100, the Montreal-based North American Commission for Environmental Cooperation (NACEC) agreed to investigate. This will bcerns. Anthony DePalma, "Deaths of Birds in Mexico Lake Test Trade Pact," NEW YORK TIMES, June 8, 1995; "NAFTA Board to Probe Deaths of Birds in Mexico," CHICAGO TRIBUNE, June 11, 1995; Kevin G. Hall, "NAFTA Group Seeks Swift Answers in Bird Kill," JOURNAL OF COMMERCE, June 20, 1995. MEXICO NAFTA OFFICE FAULTS US LABOR PRACTICES On June 2, the Mexican National Administrative Office (NAO), issued findings that Sprint probably violated the National Labor Relations Act when it terminated 177 Spanish-speaking employees at the telephone company's "La Conexin Familiar" in San Francisco last year. The Mexican NAO asked the U.S. government to review the case, and called for ministerial consultation under the provisions of the NAFTA labor side agreement. The NAO was constituted under NAFTA, as were its counterparts in Canada and the U.S., in order to review the application of labor laws in all three countries. The Mexican Telephone Workers Union (TWU) brought the case against Sprint, alleging that the employees were fired as the culmination of an anti-union campaign, including numerous unfair labor practices. TWU charged that the firings were part of Sprint's response to its workers' efforts to obtain representation by the Communication Workers of America. The Mexican NAO report follows the April 11 U.S. NAO report that concluded that the Mexican government had mishandled an unfair dismissal complaint by 45 workers of Sony Corporation in Mexico. Jerry Morales, Esq., "Mexican Board Says SPRINT Likely Violated Labor Act," "INTER-AMERICAN TRADE AND INVESTMENT LAW," June 9, 1995. 50,000 U.S. WORKERS CLAIM JOB LOSS DUE TO NAFTA More than 50,000 U.S. workers have petitioned the U.S. Department of Labor for special NAFTA unemployment assistance. The workers come from 457 firms located in 46 states, including Allied Signal, Sara Lee, Smith Corona, Eveready Battery, Zenith, and Proctor and Gamble, all of which belong to a pro-NAFTA lobbying group. Public Citizen Director Lori Wallach said that "real life job losses are NAFTA's reality," and that the petitions represent only a fraction of NAFTA's actual impact on U.S. workers. The NAFTA Trade Adjustment Assistance (NAFTA TAA) program provides job training and income support to workers who are certified to have lost jobs because of imports from Mexico or Canada or company production shifts to Mexico or Canada. NAFTA TAA statistics include only workers who petition the Department of Labor under that program, not others who may apply under the generic Trade Adjustment Assistance program, which has fewer administrative requirements. "Over 50,000 U.S. Workers Have Filed for NAFTA Unemployment Benefits," PUBLIC CITIZEN, June 7, 1995. BRAZIL, ARGENTINA CLASH OVER AUTO IMPORTS On June 13, the Brazilian government announced stringent limitations on the number of automobiles to be imported, in an attempt to deal with Brazil's continuing trade deficit and to attract foreign investment. On June 16, after strong protests from Argentina, Brazil's largest trading partner and a fellow member of Mercosur, Brazil suspended the quotas for 30 days. Argentine auto makers are already suffering from a recession, with domestic sales down by 38 percent. Together with household appliance manufacturers, they export heavily to Brazil, particularly from factories in the southern Argentine province of Tierra del Fuego, a duty-free zone. The automobile quota imposed by Brazil would allow only 110,000 vehicles to be imported during the rest of the year, virtually freezing imports since 70,000 have been unloaded in Brazilian ports and 30,000 more are on order. Argentine cars enter Brazil duty-free, while Brazilian-made cars are subject to domestic taxes of up to 50 percent. During January-March of this year, 200,000 vehicles were imported. New vehicle sales in Brazil are expected to total 1.5 million during the year. "Preocupa Que el Brasil Tome Ms Medidas Contra la Argentina," CLARIN, June 14, 1995; Oscar Florman, "Same Time Next Month - Row Over Auto Imports Postponed," INTERPRESS SERVICE, June 16, 1995; "Menem Peeved at Brazil's Decision to Cut Auto Imports," INTERPRESS SERVICE, June 14, 1995; Arnaldo Cesar, "Curbing of Auto Imports is Protectionist Move," INTERPRESS SERVICE, June 15, 1995; Ricardo de Bittencourt, "Continuing Trade Deficit Pressures Against Liberalization," INTERPRESS SERVICE, June 16, 1995. WHEAT TRADE A U.S.-Canadian panel announced a consensus on disputed wheat issues that threatened to affect the $210 billion in annual trade between the world's biggest trading partners. Canadian exports of wheat, particularly durum wheat, have sharply increased in recent years, leading to complaints of dumping by United States farmers. The new agreement will limit Canadian wheat exports to the United States to 1.5 million metric tons for one year. A new, non- governmental United States-Canada Joint Commission on Grains will study each country's grain marketing and support systems and make recommendations on longer-term solutions. In related news, U.S- based General Mills and the Alberta Wheat Pool, a farmer-owned cooperative based in Canada, announced that they will build a $1 million grain terminal in Sweetgrass, Montana to handle the increasing cross-border grain trade. Canada recently dropped an import ban on Italian pasta after a month of protests from Canada's Italian community and from small retailers. The Canadian Pasta Manufacturers Association continues to maintain that Italian pasta is being dumped in Canada at prices below Italian market levels. Italian pasta doubled its market share in Canada to 14 percent last year. The United Nations Food and Agriculture Organization (FAO) reported that Latin American wheat production rose to 15.4 tons in 1994, nine percent higher than the 1993 yield. Brazilian wheat production is expected to fall to a bare minimum of 1.5-2 million tons, far below the record production of six million tons in 1987. The dramatic fall in production is linked to decreased government support for wheat production and a preference for cheap wheat, much of which is imported from Argentina. Brazil consumes about 8.5 million tons yearly, according to the Brazilian Wheat Industry Association. The FAO predicts South American imports of 10.6 million tons of wheat in 1994-95, up slightly from the 10.5 million tons imported in 1993-94. "U.S.-Canada Trade Commission Reaches Consensus on Grain," NEW YORK TIMES; "General Mills to Build $1 Million Grain Terminal," ASSOCIATED PRESS (via STAR TRIBUNE), June 8, 1995; Maria Osava, "Commodities-Brazil: Wheat Production Down to Bare Minimum," INTERPRESS SERVICE, May 12, 1995; "Latin America: FAO Reports Rise in Wheat Production," INTERPRESS SERVICE, May 11, 1995; May 27, 1995; "Canada Drops Curbs on Pasta from Italy," JOURNAL OF COMMERCE, June 1, 1995. INTER-AMERICAN DRUG TRADE Cocaine and other drugs represent a large segment of agricultural production in the Americas and a significant aspect of international commerce. In 1993, in Colombia alone, coca planting was estimated at 42,000 hectares, with an additional 20,000 hectares in poppies and 6-8,000 hectares in marijuana. The Colombian government claims that coca and other drug production has doubled since 1993, due to defense of producers by guerrillas, who charge a tax for protecting growers, laboratories, and air fields. As officially reported Colombian export income shot up by 29.8 percent (from $1.1 billion to $1.4 billion) in the first two months of 1995, compared to the same period in 1994, many experts say that the sharp increase is due in part to fraudulent invoicing to hide drug profits. Colombian drug profits are estimated at $800 million to $3 billion annually. While drug cartels make large amounts of money, drug couriers receive relatively low pay and are at relatively high risk. Producers, too, receive far less money than those controlling marketing and distribution, and are frequently the targets of international action to destroy their fields. In the face of U.S. demands that the Bolivian government eradicate their fields, Bolivian coca producers joined with teachers and labor unions in national protests over neoliberal government policies and low wages. In April, the government responded to the strikes and protests by declaring a state of siege. Tarahumara Indians in remote villages of northern Mexico have been brought into marijuana and opium poppy production by Mexican cartels. Initially, the relatively high returns on drug cultivation attracted some farmers. Drug cartels later used violence and threats of violence to consolidate and maintain their hold on production. Mexican police and government officials frequently collaborate with the cartels, removing any avenue of appeal for campesinos who would prefer not to cooperate. Drug trafficking allegedly involves such high officials as the sons of billionaire Carlos Hank Gonzalez and the brother of ex-president Carlos Salinas. Although the United States and Europe are still the primary markets for cocaine exports from Latin America, Argentina and Chile have also increased domestic consumption in recent years. Argentina is a transit country for cocaine from Peru and Colombia, some of which is processed into hydrochloride by Bolivian-Argentine joint ventures. Most cocaine consumed in or passing through Chile comes from Bolivia. The cocaine trade has fueled a real estate boom in some Chilean cities, and benefits from banking secrecy in Chile. Nor is government corruption by drug money limited to Mexico and Latin American countries. In early June, a former senior official in the U.S. Justice Department's "war on drugs," two other former Justice Department officials, and two former federal prosecutors in Florida were indicted in Miami on charges of participating in a cocaine smuggling conspiracy. According to the New York Times, "So many Miami lawyers are under indictment at any one time that courts have been obliged to hold special hearings to inform their clients that their lawyers may have conflicts in representing them because the lawyers may also be bargaining with the prosecution for themselves." "Mexico: Narcos at the Heart of the State;" "Argentina: "White Coffee" Boom;" "Chile: Cocaine Enters Politics;" THE GEOPOLITICAL DRUG DISPATCH, May, 1995; Anthony DePalma, "Mexico's Indians Face New Conquistador: Drugs," NEW YORK TIMES, 6/2/95; Neil A. Lewis, "U.S. Charging Ex-Prosecutors in a Drug Case," NEW YORK TIMES, 6/6/95; Monica Iturralde Andrade, "Colombian Traffickers Use Ecuadorians to Smuggle Narcotics," INTERPRESS SERVICE, May, 1995; "Coca Growers Ready for Dialogue," COCA PRESS, April 26-May 2, 1995; Yadira Ferrer, "Narcoguerrillas Said Raking in Money," INTERPRESS SERVICE, May 8, 1995; "Bolivia: Strikes End, But State of Siege Continues," NOTISUR, May 12, 1995; Yadira Ferrer, "Drugs and Exports," INTERPRESS SERVICE, June 5, 1995. ___________________________________________ Produced by the Institute for Agriculture and Trade Policy, Mark Ritchie, President. Edited by Mary C. Turck. 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