From iatp@igc.apc.org Fri Jan 3 00:56:21 1997 Date: Fri, 22 Mar 1996 14:12:20 -0800 (PST) From: IATP To: Recipients of conference Subject: NAFTA & Inter-Am Trade Monitor 3-22- NAFTA & Inter-American Trade Monitor Produced by the Institute for Agriculture and Trade Policy Friday, March 22, 1996 Volume 3, Number 6 ___________________________________________ Headlines: - TRADING WITH CUBA - TOMATO PRICES RISING - WHERE'S THE BEEF? - SMART HIGHWAY - HAITIAN AGRICULTURE: EXPORTS, IMPORTS AND FOOD - IMPORTING FARM WORKERS TRADING WITH CUBA On March 12, U.S. President Bill Clinton signed into law the "Cuban Liberty and Solidarity Act," reversing his earlier opposition to the measure in retaliation for Cuba's downing of two imigri aircraft in late February. U.S. allies and trading partners on both sides of the Atlantic consistently oppose the new measure, which codifies the existing U.S. trade embargo as law and goes on to impose other trade-restrictive measures: * Cuban-Americans and other U.S. citizens will be allowed to use U.S. courts to sue foreign users of property confiscated by the Cuban government since 1959; * officers (and their families) of any companies that "traffic" in expropriated properties will be barred from entry to the United States; * any country supporting completion of nuclear facilities in Cuba will lose U.S. aid in an amount equal to the support given to Cuba; * former Soviet states supporting intelligence facilities in Cuba will lose U.S. aid in an amount equal to the support given to Cuba; * U.S. representatives to international lenders such as the World Bank will be required to veto Cuban membership and approval of loans to Cuba. The law allows the president to suspend lawsuits against "traffickers" in expropriated property for six-month periods, but the embargo may now be modified or lifted only with congressional action. Unless President Clinton delays implementation of the clause permitting lawsuits against purchasers or lessors of confiscated property, a number of high-profile lawsuits could be filed. Bacardi Rum could sue Pernod Ricard, the French liquor company that distributes Havana Club rum produced at Bacardi's old distillery in Santiago de Cuba. . A clause in the original legislation barring sale in the United States of goods made with Cuban sugar was dropped, apparently in a move to avoid clear violation of international trade agreements. Nonetheless, Mexico and Canada immediately sought NAFTA consultations with the United States on the terms of the embargo, and Canada said it would raise concerns over the law at the Organization for Economic Cooperation and Development. The European Union also said it would challenge the embargo in the World Trade Organization. Caribbean countries meeting at the Caricom-Canada summit in early March denounced the measure, worrying that it will interfere in their five-year attempt to re- integrate Cuba into the region. The Rio Group of 14 South American nations also denounced the legislation, as did the Russian parliament. While denouncing the U.S. moves, Cuban officials said that the new legislation is unlikely to slow investment in Cuba. U.S. Trade Representative Mickey Kantor maintains that the new law will not violate the provisions of NAFTA or the WTO. Robert Evans, "EU to Raise Cuba Embargo in WTO - Diplomats," REUTERS, March 18, 1996; "Canada Seeks NAFTA Talks on U.S. Cuba Sanctions," REUTER, March 13, 1996; "Mexico Joins in NAFTA Talks on New U.S. Cuba Law," REUTERS, March 13, 1996; Bert Wilkinson, "Highs and Lows as Summit Ends," INTERPRESS SERVICE, March 5, 1996; Pascal Fletcher and Stephen Fidler, "Move May Not Deter Many Foreign Investors," FINANCIAL TIMES, March 7, 1996; "Cuba Says New U.S. Law Will Not Hurt Investment," REUTERS, March 13, 1996; "Group of Rio Condemns U.S. Legislation Against Cuba," REUTERS, March 14, 1996. TOMATO PRICES RISING, FLORIDA GROWERS SUE Tomato prices hit a five-year high just a week after Mexican and Florida growers met in Dallas in mid-March to discuss this year's increase in Mexican winter tomato exports to the United States. On March 11, wholesale farm prices rose 40 cents to $1 per pound, and by March 15 they hit $1.24 per pound, six times the early January price for tomatoes. Florida growers' complaints to government officials, Mexican voluntary import restrictions, a late February freeze that killed 80 percent of the tomatoes in the Naples and Imokalee area, and more cold weather during the second week of March are credited with causing the price increase. Florida Agriculture Commissioner Bob Crawford filed a Section 201 petition with the International Trade Commission in Washington on March 11, charging Mexico with dumping tomatoes and peppers. Florida's petition cites the drastic reduction in the number of Florida tomato and pepper farmers from 200 two years ago to 100 today, with decline in their revenues from $700 million a year to $400 million a year in the same time period. Florida tomato growers accounted for 42 percent of U.S. tomato production in 1995, followed by California with 31 percent. Florida produced 39.9 percent of U.S. bell peppers, followed by California with 36 percent. While Florida hopes to find support from growers in other states for its petition, Florida tomato industry officials said that they expect California growers' connections with Mexican growers to generate some opposition to their cause. While not formally arguing that Florida growers constitute a separate industry, as they have in the past, they ask the Commission to "make a determination under the statute for both a seasonal industry (full season, October-May) and the 'annual' industry." According to U.S. Department of Agriculture figures, Mexican sales of tomatoes in the United States reached 31,000 tons during the first week of March, up from 24,500 tons during the same week in 1995 but lower than the 35,000 tons shipped during the last week of February. The decrease was credited to a Mexican move to limit certain import categories, thus decreasing overall imports. Sales of Florida-grown tomatoes nationwide during the first week of March reached 7,200 tons. "Florida Growers Take New Tack in Safeguard Case Against Mexico," INSIDE U.S. TRADE, March 15, 1996; Tom Karst, "Tomatoes Hit $25 as Result of Rain," THE PACKER, March 18, 1996; Charles Lunan, "Trade Dispute With Mexico Leads to Higher Tomato Prices," FORT LAUDERDALE SUN- SENTINEL, March 16, 1996; Jim Cason and David Brooks, "Florida Demandara a Mixico por dumping de productos agrmcolas," LA JORNADA, March 12, 1996; Jane Bussey, "Florida, Mexico Tomato Growers to Meet," MIAMI HERALD, March 7, 1996; William L. Roberts, "Dole Backs Florida Farmers in Trade Row," JOURNAL OF COMMERCE, March 11, 1996; Tom Karst, "Mexico Does Right by Restricting Color, Grade of Tomatoes," THE PACKER, March 11, 1996. WHERE'S THE BEEF? Despite continuing British opposition, European Union (EU) farm ministers agreed on March 18 on technical details of a continued ban on imports of U.S. hormone- treated beef. The measure will now be sent to the European Parliament for approval. Joined by Canada, Australia and New Zealand, the United States filed a complaint to the World Trade Organization (WTO) on January 26, arguing that there is no scientific basis for the EU ban. The WTO will begin talks on the complaint on March 27. Both Mexican and Canadian beef production is expected to climb, according to government reports in each country. Mexico's meat production increased by 8.5 percent in 1995, compared to 1994, with beef accounting for 1.422 million tons, pork at 900,578 tons, lamb at 30,050 tons, goat at 37,732 tons, and poultry at 1.336 million tons. The Canadian Agriculture Ministry said that its cattle industry can supply more of its domestic beef market, making increased imports from Australia and New Zealand unnecessary. Canadian processors have previously complained that they need imports to fill specific needs, an argument that will now be more difficult to make. Canada ships about 40 percent of its grain-fed beef to the United States. More than 2,100 Canadian and U.S. beef producers, joining forces as the Northern Plains Premium Beef Cooperative, are preparing plans for a producer-owned beef processing plant with one or more sites in the United States and Canada. "EU Keeps Ban on U.S. Hormone-Treated Beef," REUTERS, February 26, 1996; "Mexican Meat Output Up 8.5 Percent in 1995," REUTERS, February 4, 1996; Ian Elliott, "Canadian Study Looks at Future of Country's Beef Trade," FEEDSTUFFS, February 26, 1996; Carter Wood, "Northern Plains Beef Cooperative Plans Processing Plant," GRAND FORKS HERALD, March 9, 1996. SMART HIGHWAY As truck back-ups at Texas-Mexico border crossings continue, the I-35 Coalition continues to push for development of a "smart highway" that would eliminate the need for most truck inspections at the border. The I-35 highway, running from Laredo, Texas almost to the Canadian border at Duluth, Minnesota, together with the I-29 highway, which branches off at Kansas City, Missouri to the northwest to Canada are the most traveled direct trade routes among the three NAFTA nations. "Smart highway" planners, including Interdex, the U.S. Treasury Department's new International Trade Data Exchange, are exploring ways to use existing technology to speed traffic between Mexico City, Dallas, and Toronto. Railroads already use electronically readable tags attached to rail cars and read by trackside readers that send the information along telephone or fiber-optic lines. Similar technology could be applied to trucks. Inspections, including weighing and sealing of the contents, could take place at "inland ports of compliance," such as Kansas City or Toronto. A fiber- optic network of sensors laid down the middle of the highway right-of-way would assess tolls and fees along the way. Trucks crossing the Texas-Mexico border now encounter 8- 48 hour back-ups. The American Trucking Association estimates costs as high as $1.20 per minute or $1700 for a 24-hour delay. If a "smart highway" were implemented, trucks inspected and sealed at inland ports of compliance would bypass the border wait, stopping only if randomly or selectively chosen for manual inspection. Ted Landphair, "Smart NAFTA Superhighway," VOICE OF AMERICA, March 12, 1996. HAITIAN AGRICULTURE: EXPORTS, IMPORTS AND FOOD Haiti will import an estimated 401,00 metric tons of cereal grains in 1995, more than half of which will come in as food aid, further increasing the competition with locally-grown crops and lowering prices that Haitian farmers can command. In 1987, Haitian rice farmers, 63 percent of whom work plots of a quarter hectare or less, produced three-quarters of the rice consumed in the country. By 1991, Haiti produced 195,000 metric tons and imported 100,000. In 1994, Haiti imported more than 140,000 tons. Higher-producing strains of rice developed in the U.S. during the Green Revolution of the 1940s and 1950s require more fertilizers and pesticides, which Haitian farmers cannot afford. Haitian rice farmers are also handicapped by lack of mechanization, poor condition of irrigation canals and lack of storage facilities, which forces them to sell rice immediately after harvest. Local rice farmers are threatened by competition from cheap "Miami rice" imported by the Rice Corporation of Haiti, which is owned by U.S. agribusiness giant Erly Industries. The Rice Corporation now imports roughly half of the rice consumed in Haiti. Reni Prival, Haiti's new president, signaled his commitment to strengthening the country's agricultural sector by appointing agronomist Rosny Smarth as his prime minister and beginning his term with a visit to the agricultural Artibonite Valley. While nearly 70 percent of Haiti's population is rural, agricultural production for subsistence and for export has declined steadily since 1970, driven down by both overwhelming environmental degradation and liberal policies that emphasize a change from food production for domestic consumption toward export crop production and manufacturing. With 86 percent of the rural population unable to obtain even 75 percent of their daily caloric needs, people continue leaving the countryside by the tens of thousands, seeking even sub-minimum wage employment in urban areas. Thousands of peasants in the northeast, unable to produce rice because of lack of irrigation, cross the border to work in Dominican rice paddies, running the risk of robbery and killing by Dominican farmers and soldiers. Haitian peasants demand state support for irrigation systems, tariffs to protect local production against cheap imports, land distribution programs and collective farms, but the World Bank's Structural Adjustment Program calls for lower tariffs, privatization and cuts in public spending. Private financing for peasant farmers, while rarely available, carries interest rates up to 85 percent. The National Institute of Agrarian Reform, provided for in the 1987 constitution and finally established last June, has only two employees. Charles Arthur, "Between the Peasants and the Donors," INTERPRESS SERVICE, March 7, 1996; Peter Constantini, "Rice Farmers Challenged by U.S. Rice, Strong Dollar," INTERPRESS SERVICE, December 27, 1995; Ives Marie Chanel, "Prival Banks on Agriculture," INTERPRESS SERVICE, February 21, 1996; "Haiti's Agricultural Production," HAITI INFO, February 10, 1996; Ives Marie Chanel, "Rice Growers With Dry Fields," INTERPRESS SERVICE, March 11, 1996. IMPORTING FARM WORKERS Agri-business interests in California, Texas and Florida succeeded in convincing the U.S. House of Representatives Agriculture Committee to approve a farm worker amendment to the House immigration bill that would allow as many as 250,000 temporary work visas for foreign farm workers. Pressure for the farm worker provisions came from 48 organizations, including the National Cotton Council, the United Fresh Fruit and Vegetable Association, and the American Farm Bureau Federation, and from many of the representatives who have pushed for tighter restrictions on illegal immigration. Estimates of the number of undocumented workers among the 1.6 million seasonal farm workers range from 25-50 percent. Monte Lake, a lobbyist for the National Council of Agricultural Employers warned that intensified border patrols have already put pressure on the labor market. Agri-business interests fear that new identification and verification provisions, criticized by civil libertarians as creating a national identification card, would work too well, screening out farm workers who lack immigration documents. Farm worker organizations and the Clinton administration oppose the legislation, saying that agri-business interests just want a surplus of cheap labor. According to Labor Department estimates, approximately 190,000 domestic farm workers, or 12 percent of the total, are unemployed at any given time. Eric Schmitt, "Panel Votes for Workers' Visas for 250,000," NEW YORK TIMES, March 6. 1996; Peter M. Tirschwell, "Labor Shortages Loom for Farmers in California," JOURNAL OF COMMERCE, March 6, 1996; William Scally, "U.S. Legislature Debating Controversial Immigration Bill," REUTERS, March 18, 1996. ________________________________________ RESOURCES/EVENTS ________________________________________ The U.S. in Haiti: How to Get Rich on 11" an Hour, National Labor Committee Education Fund in Support of Worker and Human Rights in Central America, 1996. 72 pages. $5.00. Order from National Labor Committee, 15 Union Square, New York, NY 10003; telephone 212/242- 0700. Informational and organizing tool, with specific coverage of violation of Haitian minimum wage laws, use of "Made in USA" labels, named U.S. companies (including Disney, J.C. Penney, Walmart), suggested letters to companies. Our Americas, quarterly 11-page newsletter, published by the Hemispheric Network for Just and Sustainable Trade and Development, replaces AftaThoughts. The Hemispheric Network is a grouping of environmental, labor, family farm, women's, consumers', development and public policy organizations from around the Americas, including Action Canada Network, the Mexican Action Network on Free Trade (RMALC), the Chilean Action Network for a Peoples' Initiative (RECHIP), and the Alliance for Responsible Trade (ART). Contact Our Americas, c/o The Development GAP, 927 15th Street, NW - 4th floor, Washington, DC 20005; available electronically at trade.strategyi@igc.apc.org. ____________________________________________ NAFTA & Inter-American Trade Monitor is produced by the Institute for Agriculture and Trade Policy, Mark Ritchie, President. 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. For more information, contact Dale Wiehoff at 612-379-5980, or send email to: dwiehoff@iatp.org.