From dwiehoff@iatp.org Wed Feb 19 19:56:46 1997 Date: 19 Feb 1997 13:26:26 From: dwiehoff@iatp.org To: Recipients of conference Subject: Re: NAFTA & Inter-American Trade Monitor [The following text is in the "iso-8859-1" character set] [Your display is set for the "US-ASCII" character set] [Some characters may be displayed incorrectly] From: dwiehoff@iatp.org (Dale Wiehoff) Subject: NAFTA & Inter-American Trade Monitor NAFTA & Inter-Am Trade Monitor 2-21-97 Produced by the Institute for Agriculture and Trade Policy February 21, 1997 Volume 4, No. 4 ________________________________________________ HEADLINES: EU DELAYS CONFRONTATION OVER CUBA NEW NAFTA AG ADVISORY PANEL BORDERS OPENING TO TRUCKERS NAFTA LABOR ACCORD NOT WORKING WELL IPR DISPUTES WITH MEXICO, ARGENTINA NAFTA SUGAR DEAL QUESTIONED RESOURCES/EVENTS ________________________________________________ EU DELAYS CONFRONTATION OVER CUBA On February 12, the European Union (EU) postponed its legal challenge to U.S. sanctions against companies doing business with Cuba. EU officials asked the World Trade Organization to delay for a week the naming of a panel of judges to rule on the validity of the Helms-Burton Act. Despite intense negotiations between U.S. and European officials, the United States continued to insist that it would invoke a national security exemption for its Cuba sanctions, asserting that Cuba poses a security threat to the United States. The World Trade Organization can rule on trade disputes, but not on matters involving national security. On January 21-22, Canadian Minister of Foreign Affairs Lloyd Axworthy went to Havana to meet with his Cuban counterpart, Roberto Robaina, where the two issued a joint declaration of cooperation in the areas of economics, human rights and cultural exchanges. Canada and Cuba will begin meeting to discuss human rights issues in February, and will negotiate a Foreign Investment Protection and Promotion Agreement, which Canada hopes will parallel NAFTA's investment provisions. Canadian Ambassador to Cuba Mark Entwhistle called the U.S. embargo "a sieve," noting that products such as Coca-Cola, General Electric microwave ovens, U.S. cigarettes, U.S. auto parts and Black and Decker power tools are common in Cuba. "The reality is there are all kinds of American businessmen on the island," he said. "The National Hotel lobby . . . is packed with Americans." A report released in January by the bipartisan, Washington-based Center for Public Integrity detailed the success of the Cuban-American National Foundation in maintaining hard-line U.S. anti-Cuba policies. According to the report, "Squeeze Play: The United States, Cuba and the Helms-Burton Act," the CANF donated heavily to Senator Jesse Helms (R-NC), Representative Dan Burton (R-IN) and Senator Robert Torricelli (D-NJ). The report also says that congressional staffers who drafted Helms-Burton relied heavily on lawyers and lobbyists with ties to the Bacardi liquor empire. Foreign corporations lobbying against Helms-Burton included Mexican telecommunications company Grupo Domos and Canadian mining company Sherritt International. David E. Sanger, "Europe Postpones Challenge to U.S. on Havana Trade," NEW YORK TIMES, February 13, 1997; "Canada Defies U.S. With Cuba Visit, Strikes Investment Protection Deal," INSIDE U.S. TRADE, January 24, 1997; Tim Shorrock, "Study Eyes Money Trail Behind Helms-Burton," JOURNAL OF COMMERCE, January 24, 1997; "Official Says Cuba Embargo Just 'A Sieve,'" JOURNAL OF COMMERCE, January 31, 1997. ________________________________________________ NEW NAFTA AG ADVISORY PANEL Agriculture Secretary Dan Glickman named 10 U.S. delegates and 10 alternates to the new NAFTA Advisory Committee for Commercial Dispute Resolution Regarding Agricultural Goods on January 16, and south Florida farmers quickly protested the composition of the U.S. delegation. "None are growers and most are importers, brokers and persons with ties to foreign interest," said Gary Smigiel, chair of the Florida Farmers and Suppliers Coalition in a letter to Glickman. The panel will have equal numbers of representatives from Canada, Mexico and the United States and will serve in an advisory capacity only, according to Kenneth Clayton of the USDA's Agricultural Marketing Services. Eight of each set of 10 delegates must be from outside government and two from within government, and all must have interests in agriculture. The first focus of the new panel will be on making recommendations for procedures to achieve prompt resolution of disputes about perishable fruits and vegetables. U.S. non-governmental representatives are Daniel Coogan (Tucson, AZ), Michael Machado (Linden, CA), Matthew McInerney (Laguna Niguel, CA), Alan Middaugh (Englewood, CO), Richard Kinney (Zephyrhills, FL), Joseph Procacci (Naples, FL), Jerold Ahrens (Kerrville, TX), and L.Patrick Hanemann (Wenatchee, WA). U.S. government representatives are Kenneth Clayton and Thomas Leming of the USDA Agricultural Marketing Service. Two non-governmental alternates come from California, two from Florida, and one each from Kansas, Wisconsin, Idaho and New York. "NAFTA Dispute Advisory Committee Members Named," THE COUNTRY TODAY, January 22, 1997; Jane Bussey, "Florida Farmers Slam a NAFTA Advisory Panel," JOURNAL OF COMMERCE, January 28, 1997; "New U.S. NAFTA Advisory Panel on Commercial Farm Disputes Named," INSIDE NAFTA, January 22, 1997. ________________________________________________ BORDERS OPENING TO TRUCKERS After more than a year of delay, the Clinton Administration appears close to opening U.S. border states to Mexican trucking companies. While some press reports predicted a February announcement, others speculated that the opening may come during President Clinton's April visit to Mexico. The prospect pleases officials of the American Trucking Association and worries truckers on both sides of the border, as well as many consumer and labor groups in the United States. "This will hurt highway safety and put U. S. trucking companies in the position where they can exploit the low wages of Mexican truck drivers," said Steve Trossman of the Teamsters Union. The California Trucking Association, representing trucking companies, said U.S. truckers were missing out on hundreds of loads that moved between the Los Angeles-Long Beach port and the maquiladora manufacturing plants in northern Mexico. Under the current arrangement, U.S. truckers take the containers of components shipped from Asia to zones along the California-Mexico border, where Mexican truckers pick them up and take them to the maquiladoras. Texas A&M International University Professor James Giermanski said the drayage business, which now employs 5,000 people in ferrying goods from Mexican trucks on one side of the border to U.S. trucks on the other, will end when borders open. Under NAFTA, the U.S. and Mexican governments agreed to allow truckers to drive in border states by January 1996 and throughout each country by 2000. An estimated 80 percent to 85 percent of cargo between the United States and Mexico travels by highway. California has opened inspection stations for Mexican trucks, and says that Mexican trucks have about the same inspection failure rate as U.S. trucks. "They send only good equipment and their best drivers," reports Ron Hoffman, state director in Southern California for the Federal Highway Administration's Office of Motor Carriers, adding that Mexican carriers find it cheaper to invest in modern equipment than to pay stiff fines and penalties. Differing national trucking regulations, such as Mexico's ban on 53-foot trailers, remain to be resolved. Tim Shorrock & Chris Isidore, "Mexican Trucks Gain U.S. Access," JOURNAL OF COMMERCE, January 29, 1997; Bill Mongelluzzo, "California Truckers Seek NAFTA Action," JOURNAL OF COMMERCE, February 4, 1997; Timna Tanners, "U.S., Mexico Truckers Wary of Border Opening," REUTER, February 5, 1997; "Clinton to Visit Mexico, Latin America," REUTER, February 5, 1997. ________________________________________________ NAFTA LABOR ACCORD NOT WORKING WELL Despite the existence of a side agreement on labor as part of NAFTA, workers in Mexico say that they still routinely are denied the protections guaranteed to them under Mexican law. The most recent complaint was filed before the U.S. National Administrative Office (NAO) in October 1996 by the Communication Workers of America and two Mexican unions, the Union of Telephone Workers of the Republic of Mexico (STRM) and the Federation of Unions of Goods and Services Companies of Mexico. Workers at Maxi-Switch, a Taiwanese company that manufactures computer keyboards and games at a plant in Sonora, Mexico, say that the company and the local labor board refused their request for legal recognition of an independent union, saying that workers were already represented by the gigantic, government-aligned Confederation of Mexican Workers (CTM). Workers say they did not even know of the existence of the union that signed the contract on their behalf. The practice of company-union collusion is often called a "protection contract" between employer and a "ghost union," in order to avoid recognition of a union that would vigorously represent employees. The labor side agreement provides that NAFTA signatories will ensure impartial labor tribunals and transparent decision-making processes, but workers charge that members of the tribunal that ruled against Maxi-Switch organizing efforts were CTM officials. An earlier complaint to the NAO involved a similar complaint by Sony workers, who described a union authorization election that was called at midnight by CTM to take place the following morning. The election was held on a football field, and workers were told to go to one side or the other to vote for CTM or the independent union, as company representatives filmed the entire procedure with video cameras. Women workers, the overwhelming majority of workers in the border maquila industries, suffer particular discrimination and harassment. Mexican law allows women six weeks leave before birth and six weeks maternity leave after giving birth, all at full pay, but employers circumvent the law by requiring pregnancy tests before hiring and by making extraordinary demands on pregnant women, reassigning them to more difficult tasks, and being forced to stand rather than to sit while working, so that they will quit and not take advantage of the legally guaranteed maternity leave. Although Mexican law guarantees women the same rights as men, the legal guarantees are not enforced by the government. Harassment can be as blatant as the order given by managers of American United Global, a California manufacturer, to women at a company picnic. Female employees were ordered to strip for a "bikini contest," and the 118 women who later filed a sexual harassment suit in Mexican courts were fired from their jobs. After the women filed suit in Los Angeles, American United Global settled out of court. "NAFTA Labor Agency to Review Complaint," JOURNAL OF COMMERCE, December 12, 1996; "U.S., Mexican Unions Use NAFTA Side Deal to Challenge Mexican Labor Institutions," BORDERLINES, January, 1997; Nancy Dunne, "Mexican Job Laws Under Spotlight," FINANCIAL TIMES, September 3, 1996; Molly Moore, "Rights of Pregnant Workers at Issue on Mexican Border," WASHINGTON POST, August 21, 1996; Leslie Crawford, "Defiance Pays Off for Bikini Women," FINANCIAL TIMES, August 29, 1996. ________________________________________________ IPR DISPUTES WITH MEXICO, ARGENTINA On January 15, U.S. Trade Representative-Designate Charlene Barshefsky said that the United States would penalize Argentina for lax patent protection by withdrawing half of Argentina's Generalized System of Preferences (GSP) benefits. Barshefsky called patent and health registration laws passed in Argentina last year "far short of adequate and effective protection," and specifically objected to provisions that "provided that patent protection would not be available for pharmaceutical products until November, 2000 and contained provisions inconsistent with the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights." Pharmaceutical Research and Manufacturers of America President Alan Holmer criticized the U.S. action as inadequate, since it will result in only about a $13 million penalty. PhRMA claims that piracy by Argentine firms costs U.S. drug companies more than half a billion dollars a year. U.S. music publishers may suffer under Mexico's new copyright laws, because they will neither enjoy national treatment nor be able to invoke criminal penalties in violations involving sound recordings. Other U.S. producers of copyrighted materials criticized the hastily-passed law, which was sent to the Mexican Congress in November, passed three weeks later, and is scheduled to go into effect on March 24, as failing to meet the enforcement requirements of NAFTA because of procedural shortcomings in civil proceedings and because of apparent decriminalization of most copyright violations. "Clinton Removes Half of Argentina's GSP Benefits in Patent Tiff," INSIDE NAFTA, January 22, 1997; "U.S. IPR Industries Find Fault With New Mexican Copyright Law," INSIDE NAFTA, January 8, 1997. ________________________________________________ NAFTA SUGAR DEAL QUESTIONED In February, the Clinton Administration asked U.S. sugar producers to consider renegotiating the NAFTA side letter that governs market access for Mexican sugar. Mexican sugar producers and U.S. refiners want more raw Mexican sugar shipped to the United States. U.S. refiners want limits on the amount of refined sugar shipped, fearing that if Mexico ships all its eligible tonnage as refined sugar, it will destroy the U.S. refining industry. Under the agreement, as described by then-U.S. Trade Representative Mickey Kantor in his November 3, 1993 letter, Mexico could ship up to 25,000 tons of sugar to the U.S. in 1994-1999, if it was a net surplus producer, and up to 250,000 tons annually in 2000-2009. The letter described changes in the definition of net surplus producer to include both sugar and high fructose corn syrup in consumption figures, making it harder for Mexico to be defined as producing a surplus. Mexico is reluctant to acknowledge the validity of the side accord, citing two conflicting letters sent by then-Mexican Commerce Secretary Jaime Serra Puche on November 3 and 4, 1993, but has not formally challenged the existence of a side agreement. U.S. sugar producers may be willing to see the side agreement renegotiated, if such a deal confirms its validity. Jutta Hennig, "USDA Considers Changing NAFTA Amid Questions Over Sugar Side Deal," INSIDE U.S. TRADE, February 14, 1997. ________________________________________________ RESOURCES/EVENTS ^Õ Mexico at the Crossroads: Politics, the Church, and the Poor, Michael Tangeman. Orbis Books, Maryknoll, NY: 1995. 138 pp. $17. Explores history of interaction between Mexico's rich elite, the church and the poor majority, including background on Zapatista uprising, debates over NAFTA, and impact of neo-liberal policies on the poor. ^Õ Stubborn Hope: Religion, Politics and Revolution in Central America, Phillip Berryman. Orbis Books, Maryknoll, NY: 1994. 276 pp. $13.95. Includes introduction to church involvement in revolution in Central America, growth of evangelical churches in recent years, and clashing understandings of Christian faith. To order Mexico at the Crossroads or Stubborn Hope, contact Orbis Books, Order Department, Box 302, Maryknoll, NY 10545. Telephone 800/258-5838; fax 914/945-0670. Email: orbmarketg@aol.com. NAFTA Index: Three Years of NAFTA Facts, Public Citizen. 5 pp. Order from Public Citizen, 215 Pennsylvania Avenue SE, Washington, D.C. 20003. (202) 546-4996. Round-up of statistics on first three years of NAFTA, with footnotes documenting each item. Examples: Estimated number of U.S. jobs lost due to NAFTA as of October 1996 - 625,000; Number of jobs lost in Mexico in 1995 - 1,850,000; Increase in Mexican Maquiladora jobs since NAFTA's passage - 215,117. NAFTA's Corporate Con Artists by Sarah Anderson and Kristyne Peter. 5 pp. Covert Action Quarterly. Fall 1995. Order from CAQ, 1500 Massachusetts Avenue, #732, Washington, D.C. 20005. Telephone 202/331-9763; Fax 202/3331-9751; email caq@igc.apc.org. Article details how firms that pushed for NAFTA passage have cut jobs, moved plants to Mexico or continued to violate labor rights and environmental regulations in Mexico. 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 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 612-870-3401, or send email to: dwiehoff@iatp.org.