TRADE NEWS BULLETIN Volume II Number 43 Monday, March 8, 1993 _________________________________________________________ NAFTA News Summary _________________________________________________________ MULRONEY MAY PUT NAFTA ON HOLD An article in the TORONTO STAR suggests the Canadian government may not seek ratification of the North American Free Trade Agreement (NAFTA) before Prime Minister Brian Mulroney leaves office. The report is the first to indicate that NAFTA's ratification may be left up to Mulroney's successor. Mulroney and Trade Minister Michael Wilson have vowed to use the Conservative majority in Parliament to ratify NAFTA prior to Mulroney's resignation in June. The Liberal party, which strongly opposes NAFTA, has criticized the government for seeking speedy approval of the controversial trade pact, and wants Canada to delay ratification until after elections this fall. The New Democratic Party is against NAFTA altogether. Last week three province Premiers urged for a delay in the NAFTA, calling the federal government "highly irresponsible" for continuing the approval process prior to talks on establishing side agreements. The TORONTO STAR speculated the government may delay ratification because it realizes that seeking approval before NAFTA is submitted to the U.S. Congress could further decrease the Conservatives' popularity. Meanwhile, sources in Washington, D.C. say Clinton Administration officials realize it will be impossible to implement NAFTA by the January 1, 1994 target date and hope to give Mulroney's resignation as a reason for a delay. Source: "Canada May Postpone NAFTA Ratification -- Newspaper," REUTER, March 7, 1993. _________________________________________________________ HOUSE MEMBERS TOUR MAQUILADORAS AHEAD OF HEARINGS Majority Leader Richard Gephardt (D-Missouri) and five other members of the House of Representatives toured maquiladora production plants along the U.S.-Mexico border. Gephardt and others have criticized the maquiladoras for their low wages, poor working conditions and environmental violations. Gephardt and U.S. Trade Representative Mickey Kantor are scheduled to testify Thursday at the opening of the Ways and Means Trade Subcommittee hearing on establishing side agreements to NAFTA. Source: "Gephardt, Others Tour Mexico Plants Before Hearings," NATIONAL JOURNAL, March 5, 1993. _________________________________________________________ GATT News Summary _________________________________________________________ JAPANESE COMPANIES FIND WAYS AROUND RICE BAN While many GATT nations continue to pressure Japan to end its ban on rice imports, some Japanese companies are finding ways around the ban. The Staple Food Control Law prohibits importing rice but allows rice flour imports if the mixture contains 15 percent or more non-rice ingredients. Thaimei Food Co. imported 18,000 tons of rice flour mixed with sugar and starch from Thailand and the U.S. last year. Despite the extra labor needed to separate the ingredients before selling the rice flour to confectionery makers and sake distillers, the company figures its flour costs only half that of the domestic equivalent. Imports of the mix have been increasing at 20- 30 percent a year for the past few years. On Friday U.S. Trade Representative Mickey Kantor mentioned Japan as one of the potential trouble spots in trade this year. "Japan still maintains more hidden and overt barriers to imports than any other major trading partner," Kantor said. "Overcoming them must rank among our highest priorities." Source: Shinichi Aoki, "Creative Importers Beat Ban on Rice," NIKKEI WEEKLY, February 22, 1993; "U.S. Trade Rep. Sees Problems Ahead with Japan, China," REUTER, March 5, 1993. _________________________________________________________ CHINA STILL HOPES TO ENTER GATT THIS YEAR Despite U.S. warnings that it may be years before China is accepted to GATT, China's official CHINA DAILY said the country still hopes to enter the world trade body this year. A Chinese official said U.S. and Chinese negotiators would meet again prior to a March 15 meeting of the GATT committee considering China's application. After talks last week in Beijing, Assistant U.S. Trade Representative Douglas Newkirk said China had backed away from earlier commitments. Chinese officials contend U.S. reluctance to support China's re-entry is "political." The Clinton Administration is reportedly reviewing China's trade and human rights policies. Source: "China Clings to GATT Hopes, Worries U.S. Block 'Political,'" UPI, March 7, 1993; Tony Walker, "Long Wait for Entry," FINANCIAL TIMES, March 8, 1993. _________________________________________________________ Resources: "Maquiladoras: A Preview of Free Trade," an article by Susan Meeker-Lowry published in Z MAGAZINE, October 1992. The article gives a history of the maquiladora program and its impact on the people and environment of Mexico. For a copy, send a self-addressed stamped envelope to: Catalyst, P.O. Box 1308, Montpelier, VT 05601. _________________________________________________________ Produced by: Kai Mander and Gigi Boivin 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 _________________________________________________________