From iatp@igc.apc.orgSat Dec 16 10:44:18 1995 Date: Mon, 25 Sep 1995 14:21:52 -0700 (PDT) From: IATP To: Recipients of conference Subject: NAFTA & Inter-Am Trade Monitor 9-22 NAFTA & Inter-American Trade Monitor Produced by the Institute for Agriculture and Trade Policy September 22, 1995 Volume 2, Number 25 __________________________________________ Headlines: - PUBLIC CITIZEN: NAFTA'S BROKEN PROMISES - SETBACK FOR CBI PARITY LEGISLATION - MEXICAN DEBT RELIEF PLAN - MEXICAN GOVERNMENT, EZLN AGREE ON NEW TALKS - GOLF AND TEPOZTLAN - METALCLAD HAZARDOUS WASTES - LOGGING PROTEST GOES TO NAFTA PANEL __________________________________________ PUBLIC CITIZEN: NAFTA'S BROKEN PROMISES According to a report released in September by the Public Citizen public interest group, companies that promised to create jobs under NAFTA have failed to do so. Public Citizen identified specific job creation and export enhancement promises made by U.S. companies testifying in support of NAFTA during the 1993 debate on the trade agreement. Nearly 90 percent (59 of 66) of the specific job-creation promises have been broken. In addition, 87 percent (13 of 15) specific promises to increase exports have been broken. Some companies that specifically promised to create new jobs actually laid workers off because of NAFTA. Allied Signal, General Electric, Mattel, Proctor and Gamble, Scott Paper and Zenith all promised to create new jobs under NAFTA. Each company has laid off workers, and the U.S. Department of Labor has certified workers at each company as having lost their jobs due to NAFTA. As of mid-August, 1995, the U.S. Department of Labor had certified 38,148 workers throughout the country as having lost their jobs due to NAFTA. The certifications were made under the NAFTA-TAA (Trade Adjustment Assistance) unemployment assistance program, and represent only a portion of the total jobs lost due to NAFTA. Nearly 70,000 workers in 48 states have filed for NAFTA-TAA certification. Mattel, a California toy manufacturer, was one example cited in the Public Citizen report. In 1993, a Mattel vice- president testified that NAFTA would create jobs and have a positive effect on more than 2,000 Mattel employees in the U.S. The NAFTA-TAA program has certified that 520 Mattel workers in New York have been laid off due to increased company exports from Mexico. Mattel spokespersons told the Public Citizen researchers that it is too soon to tell whether NAFTA has created any new jobs at Mattel. The U.S. merchandise trade deficit with Mexico for the first half of 1995 was $8.6 billion. The AFL-CIO estimates that 17,000 jobs are at stake for every billion dollars in trade, suggesting that as many as 146,000 U.S. jobs have been lost in 1995. The overall U.S. trade deficit has also increased, reaching $11.3 billion in June. Public Citizen, NAFTA'S BROKEN PROMISES: CORPORATE PROMISES OF U.S. JOB CREATION UNDER NAFTA, September 4, 1995; Jim Lobe, "NAFTA Job-Creation Promises Mocked in U.S.," INTERPRESS SERVICE, September 4, 1995; Nancy Dunne, "Nafta Fails to Deliver a Feel-Good Factor," FINANCIAL TIMES, September 5, 1995; Jill Gathmann, "U.S. Trade Deficit," VOICE OF AMERICA, August 17, 1995. SETBACK FOR CBI PARITY LEGISLATION In a major blow to Caribbean Basin trade prospects, the Republican Chair of the U.S. House Ways and Means Committee, Rep. Bill Archer, dropped Caribbean Basin Initiative (CBI) parity from a major budget legislative package. The legislation, which was assured of easy passage as a rider to the budget reconciliation bill, is not expected to pass on its own, and may not even come up for debate. Former U.S. President Ronald Reagan granted special duty-free treatment for many imports from Caribbean nations in the early 1980's, under the Caribbean Basin Initiation (CBI). NAFTA abolished most tariffs between the United States, Canada, and Mexico, giving Mexico a trade advantage over CBI textile manufacturers. The CBI parity legislation, which was supported both by Democratic President Bill Clinton and the Republican Congressional leadership, would have given the CBI nations equal treatment with Mexican assembly and textile plants. Despite NAFTA, CBI textile and apparel imports to the United States have continued to grow, reaching $4.6 billion in 1994, in contrast to $2.4 billion from Mexico. Large U.S. textile manufacturers, including Fruit of the Loom, Milliken, Converse Shoes, and industry associations, opposed the CBI parity legislation, as did at least 50 congressional representatives who asked Archer to detach the CBI parity bill from the budget legislation. Before the CBI Parity legislation was removed from the budget rconciliation bill, Rep. Phil Crane proposed to eliminate the NAFTA-TAA program, a special unemployment assistance program for workers displaced by NAFTA, and to transfer its funding to compensate for federal tariff revenue lost due to CBI Parity tariff cuts. Jamaican Prime Minister P.J. Patterson, who met with U.S. President Bill Clinton on September 13, said that Clinton had pledged to support CBI Parity legislation and to recognize Caribbean banana producers' need for access to their European markets. Jim Lobe, "CBI Parity Dropped From Key Bill," INTERPRESS SERVICE, September 12, 1995; "Patterson Gains Trade Assurances From Clinton," INTERPRESS SERVICE, September 13, 1995; Nick Delle Donne, "Bill Would Cut Worker Training to Help the Multinationals," AFL-CIO IUE PRESS RELEASE, September 12, 1995; Michael Dolan, "Severe Storm Warning: Hurricane Crane," PUBLIC CITIZEN GLOBAL TRADE WATCH, September 11, 1995. MEXICAN DEBT RELIEF PLAN On September 1, the Mexican government put in place a Debtor's Aid Agreement, a plan to bail out the banking system and offer some relief to debtors. The mostly government- financed plan will reduce interest rates, extend payment deadlines, and temporarily suspend legal proceedings and foreclosures. By helping debtors, the plan will help the Mexican financial sector, which currently has an "overdue portfolio" -- unpayable debt -- equivalent to 15 percent of the total value of deposits, compared to a worldwide average of two percent. The plan is predicted to cost the government $3.2 billion and to cost banks an additional $1.1 billion. Under the Debtor's Aid Agreement credit card holders will pay a subsidized 38.5 percent on the first $800 they owe, corporate borrowers will pay 25 percent on the first $31,700 of their loans, and individual borrowers will pay 34 percent interest on bank loans up to $4,750. Mortgage-holders must renegotiate their loans in inflation-indexed terms, with banks charging 6.5 percent in real terms for balances up to $31,700 and 8.75 percent after that. The government will make payments to banks to subsidize lower interest rates. The new interest rates apply automatically to debtors whose payments are current, but those who are in arrears will have to renegotiate their loans. While the plan lasts for 13 months for most borrowers, it will be in place for 18 months for agricultural borrowers. Interest rates had climbed as high as 120 percent, but recently dropped to 37 percent on bank loans and 77 percent on credit cards. Researcher Carlos Tur, of the National Autonomous University of Mexico, called the plan regressive, because it increases the total amount that debtors end up paying to creditors, as well as extending the time period for payments. Representatives of El Barzon, part of the national debtors' movement, rejected the plan, saying it would provide relief to only 7-11 percent of the group's 1.1 million members, and called for a moratorium on payments. The National Association of Credit Card Users (ANTAC) also rejected the plan as "just more of the same," criticizing it for capitalizing unpaid interest. Finance Minister Guillermo Ortiz claims that the plan will cover the entire debts of 75 percent of Mexican debtors. El Barzon continued protests, briefly seizing banks in at least a dozen cities during the week the plan was announced. In one dramatic action, farmers left the coffin and corpse of a man they said died of a heart attack due to worry over debts in the foyer of a bank. Other Barzonista tactics have included tarring and feathering a bank repossession agent in northern Mexico and, in a subsequent action, using honey and feathers instead of tar. Eduardo Molina y Vedia, "Government Bail-Out of Banks Falls Short, Experts Say," INTERPRESS SERVICE, August 25, 1995; Al Taranto, "How Much Is Enough?" EL FINANCIERO INTERNATIONAL, August 28-September 3, 1995; Tim Golden, "Mexico Plans $1.1 Billion in Aid for the Debt Burdened," NEW YORK TIMES, August 24, 1995; "Support Program for Mexican Banking System Debtholders Announced," INTER-AMERICAN TRADE AND INVESTMENT LAW, August 25, 1995; Kevin G. Hall, "Mexican Accord to Bail Out Debtors a Mixed Blessing," JOURNAL OF COMMERCE, August 25, 1995; Leslie Crawford, "Mexico to Fund Relief for Domestic Debtors," FINANCIAL TIMES, August 25, 1995; Dianne Solis, "In Mexico, A New Kind of Rebel Emerges," WALL STREET JOURNAL, September 1, 1995; "New Program to Restructure Outstanding Loans (ADE)," MEXPAZ, August 29, 1995. MEXICAN GOVERNMENT, EZLN AGREE ON NEW TALKS In a seven-day negotiating session in early September, representatives of the Mexican government and the rebel Zapatista National Liberation Army (EZLN) made progress toward an eventual agreement. The negotiators agreed that they would begin to discuss four areas in October: indigenous rights, democracy and justice, well-being and development, and the rights of women in Chiapas. The next discussion will focus on indigenous rights. While still maintaining that their negotiations with the EZLN must be limited to Chiapan issues, the government delegates said they will agree to "discussion" but not "negotiation" of national issues. EZLN negotiators credited their just-completed national plebiscite with "opening the eyes of the government" and moving negotiations along. The government has now agreed that the EZLN can, in some way, participate in a planned dialogue on national political issues that will be held between national political parties. Anthony DePalma, "Mexico Agrees With Rebels on New Talks," NEW YORK TIMES, September 12, 1995; Diego Cevallos, "Government and Rebels Reach Initial Accord," INTERPRESS SERVICE, September 11, 1995; Jose Gil Olmos and Elio Henriquez, "La Consulta 'Abrio los Ojos del Gobierno' Para Ver el Alcance Nacional del EZLN: Tacho y David," LA JORNADA, September 11, 1995; Jose Gil Olmos and Elio Henriquez, "Acuerdo: La Primera Mesa, Sobre Derechos Indmgenas," LA JORNADA, September 11, 1995; "Mexican Rebels to Participate in National Dialogue," WEEKLY NEWS UPDATE ON THE AMERICAS, September 10, 1995. GOLF AND TEPOZTLAN International plans for an 18-hole golf course, a heliport, a $30 million computer center, and luxury residential and recreational facilities ran headlong into an alliance of peasants, villagers, and environmentalists in the town of Tepoztlan, about an hour's drive south of Mexico City in the state of Morelos. The 500-acre development would be built on private land that is located inside the Tepozteco National Park, in which Tepoztlan and four other towns are also located. Investors and participants include GTE Data Services, Jack Nicklaus Golden Bear Course Management, and powerful Mexican political and economic figures, including members of the Slim family. Tepoztlan residents, who are mostly indigenous Nahuas, seized the town hall on August 24, throwing out the mayor who had approved the construction plans. When construction began on September 3, 3,000 of Tepoztlan's 13,000 residents protested in the main plaza, seizing six local officials as hostages and running out of town the 200 state riot police sent to stop the protest. Although the hostages were later released, protests continued, with thousands of residents of other Morelos municipalities joining the Tepoztecos. On September 8, Mexico's environmental attorney general Antonio Azuela de la Cueva temporarily suspended construction, saying that zoning laws had been violated. Among the villagers' objections: the proposed development would cover an archeological site that some consider sacred ground; the golf course would use more than half a million gallons of water daily, threatening water shortages in the town; herbicides and insecticides used on fairways threaten 28 species of mammals, reptiles, and songbirds; the town already has nearly full employment and does not need the new service jobs. Francisco Guerrero Garro, "Ocupacion de la Alcaldia en Tepoztlan," LA JORNADA, September 6, 1995; Angelica Enciso and Francisco Guerrero, "Morelenses de 25 Municipios Se Unen a Tepoztecos; Ayer, Mitin Masivo," LA JORNADA, September 11, 1995; Emilio Zebadua, "Tepoztlan, Hoyo 18," LA JORNADA, September 6, 1995; Sam Dillon, "A Mexican Town Rises Up Against a Development Plan," NEW YORK TIMES, September 4, 1995; "Mexican Protests: Bus Drivers and the Golf War," WEEKLY NEWS UPDATE ON THE AMERICAS, September 10, 1995. METALCLAD HAZARDOUS WASTE SITE A U.S. company, Metalclad Corporation, is nearing final approval of La Pedrera, a large hazardous waste dump in Guadalcazar in the Mexican state of San Luis Potosi. Metalclad recently acquired a Mexican company, COTERIN, which will run this and other hazardous waste facilities that it plans in Mexico. COTERIN is responsible for a contaminated dump at the La Pedrera site, but still won government approval for the new project. Metalclad says the cleanup of 20,000 tons of hazardous waste already on the La Pedrera site is conditional on approval of commercial reopening of the toxic waste dump. Residents of Guadalcazar have fought the re-opening of the toxic waste dump for five years, ever since Mexican environmental authorities closed the COTERIN-operated site. Local engineers and ecological experts say the whole dump should be relocated, because it is sited on an earthquake fault. "Call for International Solidarity for Environmental Justice," GREENPEACE MEXICO, September 18, 1995; Alva Senzek, "U.S. Judge Tests NAFTA Waters," EL FINANCIERO INTERNATIONAL, August 14-20, 1995. LOGGING PROTEST GOES TO NAFTA PANEL The Sierra Club and National Resources Defense Council, joined by other groups from the United States, Mexico, and Canada, have filed an appeal to the North American Council on Environmental Cooperation (NACEC) in Montreal, protesting new U.S. legislation that would allow logging of fire-damaged trees on federal lands for 18 months without regard to existing U.S. environmental laws. Among the laws temporarily suspended is the Endangered Species Act. NACEC is an inter-governmental panel set up by NAFTA to investigate possible violations of national environmental laws in the three NAFTA member countries that could affect trade. Douglas Heiken, a member of the Oregon Natural Resources Council, says the new law will encourage the burning of forests in order to open them for logging. Heiken cites Oregon state investigators' reports that most large fires in Oregon appear to be the work of arsonists. The Sierra Club appeal is the third petition to NACEC. The first appeal was submitted in June by the Grupo de los Cien (the Group of 100), the Mexican Centre for Environmental Rights, and the U.S. National Audobon Society, asking NACEC to investigate the suspicious deaths last year of 40,000 birds at a lake in central Mexico. The second appeal calls for review of a new U.S. law that bans the U.S. Fish and Wildlife Service from naming new endangered species or marking out new protected areas under the Endangered Species Act for one year. Two other appeals -- one involving reduced U.S. funding for the Environmental Protection Agency and the other involving a proposed salt expansion venture in Baja California -- are expected soon. John Maggs, "Environmentalists Give GOP Ammo Against Nafta Deal," JOURNAL OF COMMERCE, August 31, 1995; William Dibenedetto, "US Faces Nafta Challenge Over Logging Program," September 6, 1995; Pratap Chatterjee, "Greens Ask NAFTA Panel to Prevent Logging," INTERPRESS SERVICE, September 4, 1995. RESOURCES/EVENTS NAFTA's Broken Promises: Corporate Promises of U.S. Job Creation Under NAFTA, Global Trade Watch, Public Citizen. Details specific promises of job creation by companies lobbying in favor of NAFTA in 1993, and subsequent failure to produce jobs. $12. Order from Public Citizen Publications, 1600 20th St. NW, Washington D.C. 20009. Credit card orders by telephone 1-800-289-3787. "Cleaning Up the Border: New Promises Under NAFTA," Summer 1995 issue of THE WORKBOOK, a quarterly publication of the Southwest Research and Information Center. 46 pp. Order from SRIC, P.O. Box 4524, Albuquerque, NM 87106. Subscriptions $8.50 students and seniors; $12 individuals; $25 institutions; Canadians add $4. Fully indexed catalog of sources includes book reviews on various topics as well as feature articles on citizen involvement in border clean-up, border environmental health councils, wastewater management in Tijuana, and extensive reportage on the Border Environment Cooperation Commission. ECOREGION, an official publication of the Secretariat of the Commission for Environmental Cooperation (CEC). 8 pp. Commission for Environmental Cooperation, 393 St-Jacques West, Suite 200, Montreal, Quebec, Canada H2Y 1N9; telephone 514/350-4300; fax 514/350-4314; email: ccastell@ccemtl.org. "Designed to inform you of the CEC activities, accomplishments and future directions." ___________________________________________ Produced by the Institute for Agriculture and Trade Policy, Mark Ritchie, President. Edited by Mary C. Turck. The NAFTA & Inter-American Trade Monitor is available free of charge to Econet and IATPNet subscribers. For information about fax or mail subscriptions, or other IATP publications, contact: The Institute for Agriculture and Trade Policy, 1313 5th Street SE, Suite 303, Minneapolis, MN 55414. Phone: 612- 379-5980; fax: 612-379-5982; e-mail: iatp@iatp.org. For information about IATP's contract research services, contact Dale Wiehoff at 612-379-5980, or e-mail: dwiehoff@iatp.org