From iatp@igc.apc.orgFri Jan 12 22:15:23 1996 Date: Fri, 12 Jan 1996 06:51:12 -0800 (PST) From: IATP To: Recipients of conference Subject: NAFTA & Inter-Am Trade Monitor 1-12- NAFTA & Inter-American Trade Monitor Produced by the Institute for Agriculture and Trade Policy January 12, 1996 Volume 3, Number 1 __________________________________________ Headlines - TRUCKS CREATE NAFTA DISPUTE - CLINTON ADMINISTRATION BACKS TOMATO GROWERS - U.S.-CANADIAN POTATO WARS - CHIAPAS: UNEASY TRUCE HOLDS DESPITE MILITARY MOVEMENTS - INTERAMERICAN TRADE, INTERAMERICAN SOLIDARITY - CANADIAN HEALTH INDUSTRY NERVOUS OVER NAFTA - MEXICAN SUGAR STRIKE ENDED - SECTION 936: PUERTO RICO AND CARIBBEAN BASIN __________________________________________ TRUCKS CREATE NAFTA DISPUTE On December 18, U.S. Secretary of Transportation Federico Pen~a announced a 45-day delay in implementation of the NAFTA provision allowing Mexican truckers free access to the highways of Texas, California, Arizona and New Mexico, and allowing U.S. truckers into Mexican border states. Fearing foreign competition, both U.S. and Mexican truckers had asked for the delay, and Pen~a initially said that the delay was acceptable to the Mexican government. However, Mexican officials filed a complaint alleging U.S. violation of NAFTA. Secretary Pen~a claimed safety concerns were the reason for his action, which was supported by Texas Republican Senator Kay Bailey Hutchison. Texas Republican Governor George W. Bush and Texas Democratic Attorney General Dan Morales maintain that Texas has already taken steps to ensure highway safety, and that the federal action is merely an attempt to solidify union support for President Bill Clinton's 1996 campaign. A coalition of consumer groups and Teamsters alleged that trucks crossing the border within the current 17-mile limit have already been found with 16-year-old drivers, bald tires, and improperly packaged toxic cargo. Earlier in December, Mexican officials had ordered strict enforcement of limits on the use of longer trailers that are more often used by U.S. and Canadian truckers. In a related move, U.S. Customs officials began accepting applications for expedited cargo clearance for short cross-border hauls, conditioned on agreement to a comprehensive anti-drug plan that requires background checks on drivers, secure premises and crime awareness training. Kevin G. Hall, "Mexico Protests Border Action," JOURNAL OF COMMERCE, December 20, 1995; "U.S., Mexico Work to End NAFTA Trucking Provision," COX NEWS SERVICE, December 21, 1995; Kevin G. Hall, "Mexico Curbs Use of Longer Trailers," JOURNAL OF COMMERCE, December 12, 1995; Kevin G. Hall, "Border Clearance Sign-Ups Set Today," JOURNAL OF COMMERCE, January 2, 1996; Debra Beachy, "U.S. Halts Expansion of NAFTA Trucking," HOUSTON CHRONICLE, December 19, 1995. CLINTON ADMINISTRATION BACKS TOMATO GROWERS A debate between U.S. Trade Representative Mickey Kantor and Secretary of Agriculture Dan Glickman was resolved with Glickman's agreement to join Kantor in calling for weekly tariff rate quotas so that import surges in fresh tomatoes can quickly trigger imposition of emergency tariffs. Florida tomato growers welcomed the unified support from the Clinton administration, which came after a symbolic dumping of Florida-grown produce on December 6 to protest alleged Mexican dumping. The Clinton administration will also back legislation proposed by Sen. Bob Graham (D-FL) to allow the International Trade Commission to consider the seasonality of the tomato industry in determining trade injury. Larry Waterfield, "Law Would Speed Trade Relief," THE PACKER, December 18, 1995. U.S.-CANADIAN POTATO WARS U.S. potato growers have charged that Canadian potato imports are having a "national impact" and that Canada is unfairly targeting exports to the United States in violation of NAFTA and the World Trade Organization. The U.S. National Potato Council wants a snap-back tariff of one percent on Canadian potatoes as a remedy for alleged unfair trade practices. Maine potato farmers, already hurt by a reduced harvest in 1995, have found that prices have not risen over 1994 levels. They attribute the failure of prices to respond to reduced harvests to increased Canadian potato shipments, including shipments of substandard potatoes. While looking into allegations of unfair practices, such as grower subsidies, the U.S. Department of Agriculture (USDA) has tightened border inspections of potatoes from Maritime Canada, especially Prince Edward Island. Canadian growers protest that the "issue is where is this level playing field promised in the trade agreements? ... The reinspection runs contrary to everything the two countries have had for 30 or so years." Larry Waterfield, "Feuds Scar Free Trade," THE PACKER, January 8, 1996; Bud Middaugh, "Potato Council Takes on Canadian Policies," THE PACKER, January 1, 1996; "Increased Border Inspections Anger Prince Edward Island Potato Growers," JOURNAL OF COMMERCE, December 20, 1995. UNREST AMONG MEXICAN CAMPESINOS Tensions throughout Mexico increased with year-end protests in several areas. Campesinos and members of the opposition Party of the Democratic Revolution (PRD) protested the ruling Institutional Revolutionary Party (PRI) electoral victories in October, with some protesters seizing town halls in a dozen municipalities on December 26 to prevent PRI governments from taking office on January 1. In Simojovel, Chiapas at 3:00 a.m. on December 31, State Police violently evicted protesters, arresting and incarcerating more than 60 people. In Ocosingo, 2,000 indigenous people protested the failure to hold a vote in October and the failure of the state government to recognize a multi-party council set up by 26,000 residents to form the new government. In Tlacoachistlahuaca in the state of Guerrero, Mixtec campesinos who had occupied the town hall since May set it on fire on December 16, and then returned to their own communities to set up a "Popular Municipal Council in Rebellion." The village of Tepoztlan, near Mexico city in Morelos state, is still in rebellion against the state government, in protest against a planned golf course. On December 2, a local PRI member, Pedro Barragan Gutierrez, was shot and later died and the state government has issued arrest warrants for homicide against 14 members of the Tepozteco Unity Community (CUT). CUT leaders say that Barragan was actually shot by a heavily armed group of PRI members who were firing indiscriminately at a CUT group. On January 3, about 150 state police evicted campesinos who had occupied the La Gloria ranch on the Pacific coast, arresting about 25 PRD members. Despite stepped-up military maneuvers throughout Chiapas throughout December, including confrontations between soldiers and large groups of indigenous campesinos protesting their incursions, the new year and the second anniversary of the Zapatista uprising passed without renewed fighting. "Mini-Rebellions in Mexican Villages and Mexico City," WEEKLY NEWS UPDATE ON THE AMERICAS, December 31, 1995; Susana Anibarro, "Arrests in Simojovel, Chiapas," LATIN AMERICAN SUPPORT OFFICE, January 1, 1996; Jose' Gil Olmos, "Military Alert in Chiapas," LA JORNADA, December 27, 1995; "Gatecrashers Expected at Chiapas' Birthday Party," INTERPRESS SERVICE, December 26, 1995. CANADIAN HEALTH INDUSTRY NERVOUS OVER NAFTA Canadian health care providers and health professionals organizations see a threat to the country's public health care system from NAFTA. Social services established and maintained for a public purpose and subject to government control can be protected from foreign investment and competition. Lists of such protected services must be maintained by governments. The U.S. Trade Representative has proposed an interpretation of "government services" that excludes any services "if the state allows private providers to offer similar services on a commercial basis." Proposed amendments to Canada's Independent Health Facilities Act will also eliminate some preferences previously granted to non-profit Canadian clinics and allow the Minister of Health to choose any company, north or south of the border, as a provider. Private health care companies in Canada are generally non-unionized and pay workers much less than those in public hospitals and their affiliated clinics. An assistant to Health Minister Jim Wilson said that his ministry had no bias against U.S. companies and was just seeking "to have the highest quality service at the best price." Lisa Wright, "Door Opens for U.S. Health Firms," TORONTO STAR, December 2, 1995; "Concern About NAFTA's Impact on Canada's Public Health Care System," CBC RADIO NATIONAL NEWS, December 21, 1995; Frances Russell, "Social Programs for Sale," WINNIPEG FREE PRESS, December 20, 1995; INSIDE NAFTA, November 29, 1995. MEXICAN SUGAR STRIKE ENDED The Mexican government intervened on December 6 to end a strike by sugar growers, ordering arbitration of the dispute that had temporarily halted the sugar harvest. Prices paid to sugar farmers are expected to increase in an amount between the 40 percent demanded by farmers and the 30 percent offered by refiners. Even after arbitration was ordered, Mexican sugar growers continued their strike against three mills, demanding that debts be paid before they delivered cane for milling "Sugar Prices Grow in Mexico," AGWEEK, December 11, 1995; Chris Aspin, "Mexico Sugar Growers on Strike Against Three Mills," REUTERS, January 5, 1996. INTERAMERICAN TRADE, INTERAMERICAN SOLIDARITY A U.S. government delegation led by assistant U.S. Trade Representative (USTR) Jon Rosenbaum visited Guatemala, El Salvador, and Honduras in late 1995, delivering the message that progress on worker rights is a condition of continued eligibility for duty-free trade benefits provided by the U.S. Generalized System of Preferences (GSP). U.S. labor and human rights organizations had filed petitions opposing Guatemalan eligibility for GSP, and the USTR office is reviewing Guatemalan eligibility. For the first time, the USTR delegation invited the GSP petitioners to send representatives with the delegation as advisors. A campaign by labor and solidarity groups in El Salvador and the United States convinced the U.S. retailer Gap Inc. to work with human rights officials in Central America to monitor working conditions at maquilas that have contracts to supply Gap. In December, Gap also agreed to renew a contract with the Taiwanese-owned Mandarin International maquila in El Salvador, a specific focus of the campaign, if Mandarin rehires 330 workers fired last June, allegedly for union activities. In Guatemala, significant lobbying efforts focused on Marissa maquila, where the vast majority of union members were fired last fall and union leaders were kidnapped, drugged, bribed, and threatened with death in 1994. Pressure by the US/Guatemala Labor Education Project campaign on U.S. companies supplied by Marissa led to an agreement that Marissa officials will meet with union leaders to deal with issues of violence. Some Central American government and union officials criticize U.S. pressure as a self-interested effort to preserve U.S. apparel manufacturing jobs. Salvadoran President Armando Caldero'n Sol, whose economic program relies heavily on promotion of maquilas and includes a vision of El Salvador as "one big duty-free zone," denounced the campaign for improved maquila conditions, labeling opposition deputies who supported the campaign as "traitors to the fatherland." Labor and solidarity groups in both countries have urged that U.S. retailers take action to protect worker rights, rather than terminating contracts, which results in loss of jobs. U.S. apparel manufacturers say that NAFTA and GATT have hurt them badly, and predict further damage if the Caribbean Basin Initiative (CBI) parity legislation is enacted. Al Howell, executive director of the Southeastern Apparel Manufacturers & Suppliers (SEAMS), speaking tongue-in-cheek at an October meeting, quoted from the bible, Zephaniah 1:8 that God would "punish the princes and the king's children and all such as are clothed with foreign garments." Some U.S. manufacturers, however, are taking advantage of cheaper foreign labor by entering into contracts or joint ventures with offshore firms. "U.S. Trade Representative Turns Up Heat on Guatemala," GUATEMALAN WORKER RIGHTS UPDATE, January 3, 1996; "Gap Inc. to Help Watch Maquilas," CENTROAMERICA, January 1996; Flanigan, "Maquiladora Overview," U.S. EMBASSY CABLE, September 25, 1995; Georgia Lee, "U.S. Contractors Cry the Blues Over Biz Moving Offshore," DAILY NEWS RECORD, October 31, 1995. SECTION 936: PUERTO RICO AND CARIBBEAN BASIN Manufacturers in Puerto Rico threatened by the proposed elimination of Section 936 tax breaks have been joined by Caribbean and Central American countries in opposition to the repeal of Section 936. The tax break, which partially exempts profits earned from manufacturing in Puerto Rico from U.S. income taxes, is a major support for Puerto Rico's manufacturing sector, which accounts for 40 percent of its gross domestic product. Section 936 also funds significant financing for agribusiness projects in Caribbean Basin Initiative (CBI) countries. An end to Section 936 would cripple this low-cost financing program, which has promoted more than 180 projects since 1987, creating 37,000 jobs and resulting in investment of $2.1 billion, including $1.2 billion in direct CBI loans or bond issues from Puerto Rico's Caribbean Basin Projects Financing Authority. The ten eligible countries are Jamaica, Dominica, Barbados, Costa Rica, the Dominican Republic, Grenada, Guyana, Honduras, St. Lucia and Trinidad & Tobago. Larry Luxner, "Officials Call for Elimination of Tax Program," THE PACKER, December 25, 1995. __________________________________________ RESOURCES/EVENTS __________________________________________ NAFTA's Broken Promises: The Border Betrayed, published by Public Citizen and Red Mexicana de Accisn Frente al Libre Comercio (RMALC), January 1996. 100 pp. Provides information on trends in concentration of maquila industries in border area, with particular reference to environmental impacts, pollution, hazardous waste, and birth defects attributed to environmental causes since implementation of NAFTA on January 1, 1994. $15. Order from Public Citizen Publications, 1600 20th Street NW, Washington, DC 20009. (202/546-4996). No Laughter in NAFTA, published by Institute for Policy Studies, Development GAP, and Equipo PUEBLO, December 1995. Study of impact of NAFTA on workers, farmers and women, and environmental deterioration in Mexico and the United States since January 1, 1994 documents NAFTA-related job losses in United States and loss of jobs and purchasing power by Mexican workers. Order from The Development GAP (202/898- 1566) or The Institute for Policy Studies (202/234-9382). A Bitter Pill: Structural Adjustment in Costa Rica, by Alicia Korten, June 1995. Institute for Food and Development Policy, 389 60th Street, Oakland, CA 94618. 78 pp. Explores failure of structural adjustment policies to resolve gap between exports and imports or to solve debt problems, despite success in increasing exports and stabilizing unemployment at a higher rate. $8 plus $4 s&h from Subterranean Company, Box 160, 265 S. 5th Street, Monroe, OR 97456. Telephone 800/274- 7826; fax 503/847-6018. Advancing the Miami Process: Civil Society and the Summit of the Americas, edited by Robin Rosenberg and Steve Stein, 1995. Lynne Reinner Publishers, 1800 30th Street, Suite 314, Boulder, CO 80301-1026. Collection of official Summit documents, intergovernmental publications, proposals from non-governmental sectors, and summit correspondence. $29.95. Order from Lynne Reinner Publishers, 1800 30th Street, Suite 314, Boulder, CO 80301-1026. Telephone 303/444-6684. ____________________________________________ NAFTA & Inter-American Trade Monitor is produced by the Institute for Agriculture and Trade Policy and edited by Mary C. Turck. Electronic mail versions are available free of charge for subscribers. For information about fax subscriptions contact: IATP, 1313 Fifth Street SE, Suite 303, Minneapolis, MN 55414. For information on subscribing to this and other IATP news bulletins, send e-mail to: iatp- info@iatp.org. IATP provides contract research services to a wide range of corporate and not-for-profit organizations. 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