From iatp@igc.apc.org Fri Nov 15 22:02:29 1996 Date: Thu, 14 Nov 1996 07:37:22 -0800 (PST) From: IATP To: Recipients of conference Subject: NAFTA & Inter-Am Trade Monitor 11-15 NAFTA & Inter-American Trade Monitor Produced by the Institute for Agriculture and Trade Policy Friday, November 15, 1996 Volume 3, Number 22 __________________________________________ Headlines: - ELECTION IMPACT ON TRADE - MULTI-FACETED BANANA CONFLICTS - TUNA, TRADE AND THE ENVIRONMENT - FROM BIODIVERSITY TO BIOTECHNOLOGY - MERCOSUR AND MOVEMENT ON FTAA __________________________________________ ELECTION IMPACT ON TRADE __________________________________________ The recent U.S. elections left in office as many members of the U.S. House of Representatives who voted against NAFTA as those who voted for it 143 on each side, and 149 members who were not in the House at the time of the NAFTA vote. The Republican majority in the House of Representatives includes Oregon Republican Bob Smith, the likely new chair of the House Agriculture Committee. Smith says he wants to "revisit NAFTA," because of complaints of unfairly priced Mexican cattle and Canadian grain. A new poll by the Bank of Boston shows 51 percent of U.S. citizens believe that free trade pacts cost U.S. jobs and 57 percent oppose any new trade agreements with Latin America. An even larger majority of 73 percent want labor and environmental issues negotiated as part of any new trade accords. The U.S.-based International Brotherhood of Teamsters warned that President Clinton will probably respond to requests from California Governor Pete Wilson and the American Trucking Association and lift the ban on cross- border trucking in border states on December 18, the first anniversary of the U.S.-imposed delay in compliance with NAFTA trucking provisions. "NAFTA 'No' Voters No Longer a Minority in the House of Representatives," PUBLIC CITIZEN NEWS RELEASE, November 8, 1996; "NAFTA Impact Next U.S. House Ag Chairman," AGNET, November 6, 1996; "Poll Shows Public Believes Trade Pacts Cost U.S. Jobs," BANKBOSTON PRESS RELEASE, November 7, 1996; "NAFTA Trucking Delay," INTERNATIONAL BROTHERHOOD OF TEAMSTERS MEMORANDUM, November 1, 1996. MULTI-FACETED BANANA CONFLICTS Caribbean banana-producing countries, angered by the U.S. opposition that resulted in their legal counsel being barred from World Trade Organization hearings, accused the United States of attempting to destroy their economies. The U.S. challenge to European Union policies favoring Caribbean producers is supported by some Latin American countries, but the Caribbean countries say the challenge does not recognize the crucial role of banana trade to their small, island economies. A rebel banana farmers' union in the eastern Caribbean nation of Santa Lucia, the Banana Salvation Committee, has gone on strike to demand release from their contractual agreement to sell bananas to the Windward Islands Banana Development and Exporting Company (Wibdeco), the regional marketing agency, in order to sell to Chiquita Brands, a U.S.-based multinational that produces bananas in Latin America. Another banana union in Belize is fighting against Irish fruit multinational Fyffes Ltd., following Fyffes' 1995 firing of leaders of the United Banners Banana Workers' Union. As a former British colony, Belize also benefits from the EU banana regime. Fyffes controls all foreign marketing of Belizean bananas and has successfully resisted organizing efforts by the independent union. When the union struck last year, Belizean security forces reportedly arrested 350 strikers and tried to deport them to Guatemala. Although many banana workers are migrants from Central American countries, Guatemala refused most of the strikers, saying they were not Guatemalan. While banana producers typically use high amounts of pesticides, they can respond quickly when pesticide use threatens markets. In 1991, Costa Rica suspended use of aldicarb after the U.S. Department of Agriculture barred several shipments for impermissible residue levels of the pesticide. Banana-producing companies and countries have been slower to regulate pesticides that merely kill fish or have carcinogenic and mutagenic effects on field workers. Canute James, JOURNAL OF COMMERCE, "Caribbean Banana Producers Accuse U.S. of Trying to Squash Their Economies," October 18, 1996; Canute James, "Caribbean Banana Union Strikes for Chiquita Sales," JOURNAL OF COMMERCE, October 7, 1996; Macdara Doyle, "Busting Banana Unions in Belize," MULTINATIONAL MONITOR, September, 1996; Andrew Wheat, "Toxic Bananas," MULTINATIONAL MONITOR, September, 1996. TUNA, TRADE AND THE ENVIRONMENT U.S. President Bill Clinton pledged to Mexico that he will push for legislation to lift the U.S. tuna embargo by changing the definition of "dolphin-safe" tuna early next year. The Clinton administration failed to get Senate approval of the "Panama Declaration" this year. The Panama Declaration would change U.S. law in return for creation of an international marine-species protection program in the eastern Pacific. Mexico and other Latin American fishing nations have threatened a formal challenge to the U.S. tuna embargo before the World Trade Organization. The easiest and cheapest way to catch large, yellow-fin tuna in the Pacific also puts dolphins at risk. Many U.S. supporters of the ban maintain that national sovereignty is at stake, while Latin American activists oppose what they see as unilateral U.S. action in violation of NAFTA and WTO rules. Other environmental-trade issues in the news recently include: * The U.S. Congress authorized the Border Patrol to build a 50-mile-wide, 2,000-mile-long corridor from San Diego through Texas, and exempted the Border Patrol from compliance with the Endangered Species Act or the National Environmental Policy Act. Environmentalists fear that the Border Patrol will pave over or fence out animals and their habitat in the 40 million acres covered by the authorization, harming as many as 100 species in Arizona alone. * Mexican Environment Secretary Julia Carabias said that export of hazardous waste from the maquiladora sector has increased significantly over the past year. Under NAFTA, the plants will no longer be required to export their wastes in the year 2000. Carabias also said that her office will eliminate a backlog of environmental impact studies by the end of the year, and will exempt small and medium-sized industries operating in industrial parks from filing environmental impact statements. * The Commission for Environmental Cooperation was authorized in September to investigate how a cruise ship dock received construction permits on the Mexican resort island of Cozumel. The CEC secretariat is made up of the environmental ministers of Mexico, Canada and the United States. * Canadian environmentalists oppose a U.S. company's claim that Canada has violated NAFTA by trying to restrict sales of methylcyclopentadienyl manganese tricarbonyl (MMT), a gasoline additive that may be a neuro-toxin. Ethyl Corporation claims that the anti-MMT legislation "constitutes a substantial interference with Ethyl Corporation's control and enjoyment of its investment in Canada," and claims that because the health hazards of MMT have not been fully established, the Canadian government cannot restrict its sale or use on public health grounds. Ethyl also claims that statements by the Canadian environment minister about MMT are "defamatory and reckless," and is suing for "expropriation of goodwill." "Clinton Pledges Early, Renewed Effort to Pass Tuna- Dolphin Bill," INSIDE U.S. TRADE, October 18, 1996; Harry Brown, "Dolphin-Tuna Issue Puts Cross-Border Environmental Collaboration to the Test," BORDERLINKS, September, 1996; "Border Patrol Allowed to Violate Environmental Laws, KNIGHT-RIDDER/TRIBUNE, October 9, 1996; "Significant Rise Seen in Hazardous Waste Sent to U.S. by Border Plants, Official Says," INTERNATIONAL ENVIRONMENTAL REPORTER, September 18, 1996; Kevin G. Hall, "Dock Probe Tests Nafta's 'Green' Panel," JOURNAL OF COMMERCE, September 17, 1996; Stephen Dale, "NAFTA-Based Lawsuit Angers Activists," INTERPRESS SERVICE, September 26, 1996. FROM BIODIVERSITY TO BIOTECHNOLOGY Colombian Minister of Environment Josi Mogollon told the first Forum of the Andean and Amazonian Countries on Biodiversity in July that they must present a united front to protect biodiversity and the region's environmental treasures. He discussed regulation of intellectual property rights and protection of the environment as key to protection of biodiversity. Five Andean nations (Bolivia, Peru, Colombia, Ecuador and Venezuela) approved the Common Regime on Access to Genetic Resources this summer. The regime regulates access to genetic resources and products derived from them, recognizes the knowledge and rights of indigenous communities, and promotes conservation of biodiversity. Despite fears that the regime could lead indigenous people to sell off their culture, the Aguarunas Indian community contracted to pass on knowledge and technology to Searle Farmaceutical, an affiliate of the Monsanto group. The Aguarunas will retain property rights to the information, and will receive royalty payments of between $50,000 and $70,000 annually. Recent mergers in Mexico aim to bring genetically- engineered produce to market, combining DNA Plant Technology Corporation and Monterrey-based Empresas La Moderna. A DNAP executive said that the merger brought critical access to "the best germ plasm." Empresas La Moderna recently reached a cooperation agreement with Monsanto, which has a controlling interest in another genetic engineering development company, Calgene Inc. Mycogen Corporation, the sixth-largest seed company in the United States, expanded its seed business in South America in October by purchasing Morgan Seeds, Argentina's second largest seed company. Jerry Caulder, Mycogen chief executive officer said Mycogen's genetics, together with insect-resistance and oilseed technology, will help provide new products for South America. In July, Ecuadorean non-governmental organizations successfully opposed an attempt by the Ecuadorean Congress to ratify a bilateral intellectual property right agreement with the United States. The agreement would have required Ecuador to enforce U.S. patents on living organisms. Ecuadorean ecologists and indigenous peoples argued that the already-granted U.S. patent on the Amazonian plant ayahuasca constituted bio- piracy of indigenous knowledge and resources. Intellectual property rights include copyright,trademark and patent protections, and are a major U.S. concern in trade negotiations. The U.S. Trade Representative said it will review Panamanian and Paraguayan protection of intellectual property rights in regard to counterfeiting of video games. IPR practices are also under review in Colombia, El Salvador and Honduras. Maricel Sequeira, "Technology Flows North," INTERPRESS SERVICE, October 20, 1996; "Ecuadorean NGOs Stop Bilateral IPR Agreement With the United States," RAFI COMMUNIQUE', July/August, 1996; Tom Zind, "Merger to Speed Biotech Timetable," THE PACKER, October 7, 1996; "Latin American Countries Must Unite on Protection of Biodiversity, Forum Told," INTERNATIONAL ENVIRONMENT REPORTER, July 24, 1996; Michael Howe, "Mycogen Buys Argentine Firm," FEEDSTUFFS, October 7, 1996; "USTR to Examine Panama, Paraguay Regimes Under GSP Review," INSIDE NAFTA, October 16, 1996; "Colombia Urged to Revamp Investment, IPR Rules Before Trade Talks," INSIDE NAFTA, October 2, 1996. MERCOSUR AND MOVEMENT ON FTAA A draft World Bank report criticizing Mercosur for distorting international trade by favoring its own capital-intensive industries and raising high tariff barriers to external manufacturers of products such as cars, buses, and agricultural machinery has caused a continuing political storm. Although the draft report was leaked in October, the World Bank did not release the report and instead publicly defended Mercosur as "an important and positive initiative" that has boosted internal trade and attracted increased foreign investment. Mercosur, and especially Brazil, dominate Latin American discussions of trade agreements and of the proposed Free Trade Area of the Americas (FTAA). The four Mercosur members Argentina, Brazil, Paraguay and Uruguay were joined by Chile on October 1, despite strong opposition by Chilean farmers. The five members of the Andean Community Bolivia, Colombia, Ecuador, Peru and Venezuela have also launched negotiations for a merger with Mercosur. Bolivia has already reached an agreement with Mercosur that will become effective on January 1, 1997, over the objections of Bolivia's agroindustrial sector. Mexico and Mercosur are negotiating a preferential trade agreement to replace bilateral agreements between Mexico and each of the Mercosur member countries. Mexican Commerce Secretary Herminio Blanco predicts that Mexico and Mercosur will negotiate a free trade agreement in 1997. Outside Latin America, Mercosur is also negotiating trade agreements with the European Union and the Community of Independent States, the alliance of former Soviet Union republics. Without fast-track negotiating authority from Congress, the U.S. Clinton administration is handicapped in pursuing FTAA negotiations and virtually blocked from negotiating any other trade agreements with Latin American trade blocs or individual countries. That leaves Mercosur, dominated and led by Brazil, in a position to influence free trade negotiations in the Americas. Guy de Jonquie'res, "World Bank Softens Criticism of Mercosur," JOURNAL OF COMMERCE, October 29, 1996; "Chile Joins Southern Cone Common Market as Andean Nations Agree to Multilateral Free-Trade Negotiations With Mercosur," NOTISUR, October 4, 1996; Abraham Lama, "Andean Community Gives Top Priority to Mercosur," INTERPRESS SERVICE, October 11, 1996; Juan Carlos Rocha, "Bolivia's Business Sector Rejects Mercosur Merger," INTERPRESS SERVICE, October 15, 1996; "Mexico-Mercosur Talks Could Conclude Within Months, Lampreia Says," INSIDE NAFTA, October 2, 1996; Kevin G. Hall, "Mexico and Mercosur Set to Exchange Product Lists," JOURNAL OF COMMERCE, October 28, 1996; Mario Osava, "Integration Beyond Trade," INTERPRESS SERVICE, October 14, 1996; Scott Otteman, "Mercosur Plan Should End Worry of FTAA Delay Tactics, Official Says," INSIDE NAFTA, October 2, 1996; "A Survey of Mercosur: Remapping South America," (special section) THE ECONOMIST, October 12, 1996. __________________________________________ TRADE NEWS BRIEFS __________________________________________ * A trade disputes panel set up under the provisions of NAFTA rejected U.S. sugar producers' challenge to the duties imposed by Canada on U.S. sugar 15 months ago. Canadian sugar beet farmers support the duties, but some Canadian businesses that use sugar were not pleased and one such company is threatening to move 1,000 jobs to the United States. Canadian imports of cheaper U.S. sugar fell from 74,000 metric tons during the first half of 1995 to 20,000 tons during the same period in 1996. Only 10 percent of Canadian-produced sugar comes from Canadian-grown beets, with the rest coming from imported cane. * California avocado industry representatives again asked the U.S. Department of Agriculture to delay a final ruling that would allow Mexican avocados into the northeastern United States. The California Avocado Commission maintains that the files of the USDA's Animal and Plant Health Inspection Service (APHIS) show that Mexican pest trapping and inspection procedures were not adequate to detect the presence of fruit flies.According to the California Avocado Commission, APHIS officials reported that some packinghouses and groves were in good condition, but that major infractions were observed in others and that the Mexican plant health agency, Sanidad Vegetal, did not always conduct adequate inspections. Barry Wilson, "Canada Keeps Duty on Sugar," WESTERN PRODUCER, October 31, 1996; Roberta Rampton, "Sugar Beet Players Need to Find a Strategy," WESTERN PRODUCER, October 31, 1996; Larry Waterfield, "Group Calls for Delay on Issuing Final Rule," THE PACKER, November 4, 1996. __________________________________________ NAFTA & Inter-American Trade Monitor is produced by the Institute for Agriculture and Trade Policy, Mark Ritchie, President. Editor: Mary C. Turck. NAFTA & Inter-American Trade Monitor is available on-line free of charge. For additional information about fax/mail subscriptions or to receive a free listing of all available Institute research reports and documents, contact: Institute for Agriculture and Trade Policy, 2105 1st Avenue South, Minneapolis, MN 55404. (612) 870-0453; fax: 870-4846; e-mail: iatp@iatp.org. To learn more about IATP's contract research services, contact Dale Wiehoff at 612-870-0453 or e-mail: .