TRADE NEWS BULLETIN Volume 2 Number 30 Wednesday, February 17, 1993 _________________________________________________________ NAFTA News Summary _________________________________________________________ MEXICAN FUND ENCOURAGES US COMPANIES TO MOVE SOUTH U.S. House Majority Leader Richard Gephardt (D-Missouri) and opponents of the North American Free Trade Agreement criticized the Mexican government for its role in encouraging U.S. companies to relocate to Mexico. State-owned Mexican bank, Nacional Financiera S.N.C., is a principal partner to the AmeriMex Maquiladora Fund Limited Partnership, which states in its prospectus that it hopes to raise $50 million to buy nine to 13 companies with annual sales ranging from $10 million to $100 million. "Moving the manufacturing operations to Mexico will significantly reduce the labor costs of production and enhance the profitability of these companies," the prospectus states. In a letter to Mexican President Carlos Salinas de Gortari, Gephardt wrote, "Funds such as this should not be allowed to operate. But even more objectionable is the official participation of entities controlled by your government in stealing American jobs." The controversy will certainly stir U.S. trade unions, who fear NAFTA will lure U.S. firms to Mexico in search of cheap labor and lax enforcement of environmental laws. U.S. Trade Representative Mickey Kantor is expected to discuss the issue during a meeting today with Mexican Trade Minister Jaime Serra Puche. Sources: "Mexico-Fund," ASSOCIATED PRESS, February 17, 1993; CONGRESS DAILY, February 16, 1993; "Gephardt Assails Mexican Bid to 'Steal' U.S. Jobs," REUTER, February 16, 1993. _________________________________________________________ GATT News Summary _________________________________________________________ EC ASKS FOR TRADE DISPUTE PANEL OVER U.S. AUTO TAXES Frustrated with "fruitless" bilateral talks, the European Community will ask the General Agreement on Tariffs and Trade (GATT) to determine whether U.S. "gas guzzler" taxes and other duties discriminate against foreign automakers. The EC says the taxes, which are levied on gas mileage and fuel economy criteria, violate GATT rules. In 1991, the U.S. collected $494 million from the taxes on European cars. "We can't help it if the cars they send us are gas guzzlers and in the up-market category with big engines," said one U.S. official in support of the taxation. "Our view is that the taxes are assessed on a national treatment basis. There is no discrimination between U.S.- origin or foreign-supplied vehicles." The EC asked GATT to establish a new dispute panel to look into the duties, which affect 88% of imported European cars. Source: John Zarocostas, "EC to Ask GATT to Examine U.S. Gas-Guzzler Tax," JOURNAL OF COMMERCE, February 12, 1993. _________________________________________________________ FRANCE SUGGESTS NEW FARM POLICY France's planning commission said France should move quickly to create a new farm policy more in line with its own idea of agriculture than the European Community's. As the EC's largest agriculture producer, France should play a greater role in determining farm policy, the commission's agriculture committee said. It criticized aspects of the recently reformed Common Agricultural Policy (CAP) and called for a renegotiation of November's EC-U.S. GATT farm trade agreement. The commission said it is unfair to expect France to absorb one-third of the EC's 15 percent set aside program. "Set-aside should not be durably used as a way to adjust supply and demand," said the commission. It also suggested "pushing for less intensive farming practices and finding new outlets in the animal feed industry and in non-food sectors." The proposal encourages a greater commitment toward environmentally friendly farming, which is absent from the current U.S.-EC farm deal. The French employers' group, the CNPF, called for a complete renegotiation of the Uruguay Round of GATT with no deadline. Francois de Laage de Meux, head of the CNPF's international committee expressed solidarity with French farmers and said GATT needs to represent industry and services globally. Sources: "French Employers Want Global, Balanced GATT Deal," REUTER, February 16, 1993; "France Encouraged to Act Quickly for New Farm Plan," REUTER, February 16, 1993. _________________________________________________________ Resources: TAKING "X" OUT OF COMPETITION: AN INTERNATIONALIST CRITIQUE OF COMPETITIVITY-ENHANCING STRATEGIES, a report by economists Stephen Cullenberg and George DeMartino. The writers view the competitivity crisis of the United States as a political crisis as much as an economic one and argue for a "redefinition of the game of competition in order to ensure that high standards of living are universalized." Cullenberg and DeMartino contend that certain aspects of society should be taken out of competition to guarantee recognition and enforcement of a basic set of human, political and economic rights. For a copy of the report, contact Stephen Cullenberg, Department of Economics, University of California - Riverside, Riverside, CA 92521. Tel: (909) 787-5219. Fax: (909) 787-5685. _________________________________________________________ Produced by: Kai Mander The Institute for Agriculture and Trade Policy (IATP) 1313 Fifth Street SE, Suite #303 Minneapolis, MN 55414-1546 USA Telephone:(612)379-5980 Fax:(612)379-5982 E-Mail:kmander@igc.apc.org _________________________________________________________