TRADE NEWS BULLETIN Volume II Number 46 Thursday, March 11, 1993 __________________________________________________ NAFTA News Summary __________________________________________________ STATES PREPARING FOR NAFTA U.S. Trade Representative Mickey Kantor told the Senate Finance Committee Tuesday that the North American Free Trade Agreement will have an "enormous positive effect on the U.S. economy and U.S. jobs," but he also promised the Clinton Administration would walk away from the pact unless agreement is reached with Canada and Mexico on establishing side labor and environmental accords. While NAFTA's future is still uncertain, some states have begun preparing for the trade pact by increasing business ties with Mexico. The prospect of NAFTA has generated enthusiasm among several industries, including manufacturers of auto parts, farm products, steel and textiles. In Mexico City, Michigan Governor John Engler said the opening of Mexican markets under NAFTA will benefit his state. "We have many Michigan companies already doing business here and our state's exports to Mexico are approaching $2 billion annually." Some studies predict U.S. auto part exports to Mexico will increase under NAFTA, from $8.3 billion in 1990 to $21 billion by 1995. Other states expect similar gains for certain industries. Among them: California for camping gear and natural shampoos, Wisconsin for farm machinery and dairy cow feed, Georgia for mobile homes, and Massachusetts for computer software. AFL-CIO leaders however continue to reject the notion that more exports will equal more jobs. "We've already seen about half a million manufacturing jobs leave the U.S. and go to Mexico," said Jon Ogar, a spokesperson for the union in Michigan. "We think NAFTA as currently constructed and agreed to back in September will accelerate that exodus." Source: Bill Cormier, "Mexico-Courting Trade," AP, March 10, 1993; Peter Behr, "Kantor Pitches Pact On Hill; Official Says NAFTA Offers Many Benefits For U.S. Economy, Jobs," WASHINGTON POST, March 10, 1993. __________________________________________________ GATT News Summary __________________________________________________ CHINA EAGER TO JOIN GATT, OPENS SOME TRADE China has announced a list of concessions it is willing to make to join the General Agreement on Tariffs and Trade (GATT). Although no timeframe was given, China outlined several steps it will take to appease U.S. concerns. China said it will establish a public quota system, adhere to GATT and other international provisions protecting new industries, lower tariffs further, and reduce the number of items subject to import and export license controls. In addition, Beijing said it will give "national treatment" to foreign investments and allow more foreign trade. During talks last week, U.S. officials accused China of retreating from previous trade stances. The U.S., which headed the review of China's application, criticized China's lack of commitment to an open market system and indicated that some evidence of a new human rights position was necessary. Chinese Foreign Ministry Spokesperson Wu Jianmin said U.S. threats to revoke Most Favored Nation (MFN) trade status are "undesirable and will have no effect," but China's new position indicates it is eager to become a GATT member this year. Sources: "China Warns U.S. Against Trade Status Conditions," REUTER, March 11, 1993; P.T. Bangsberg, "Chinese Aim To Facilitate GATT Re- Entry," JOURNAL OF COMMERCE, March 8, 1993. __________________________________________________ CLINTON DRAFTS NEW ASIAN TRADE POLICY In an attempt to stimulate the U.S. economy, President Bill Clinton is currently drafting a trade policy which will focus on managed trade with Asia. According to administration officials, the policy, aimed at Japan, China and Southeast Asia, will combine aid to American high- technology industries with negotiations to open Asian markets for these products. Under the plan, the Commerce Department will spend money to aid computer, semiconductor and aerospace industries to stay technologically competitive, while the Office of the Trade Representative will oversee negotiations to open Asian markets for these products. USTR Mickey Kantor said administration officials were excited about the proposal. U.S. officials are still working on the plan, but sources say it will be released in the near future. Sources: "GATT States to Push Major Powers on Trade Treaty," REUTER, March 11, 1993; Keith Bradsher, "New Policy Forming on Asia Trade," NEW YORK TIMES, March 11, 1993; "Clinton Advisor Seeks Further Stimulus in Japan," AGENCE FRANCE PRESSE, March 10, 1993. __________________________________________________ Events: "FREE TRADE IN NORTH AMERICA: THE OCCUPATIONAL AND ENVIRONMENTAL HEALTH IMPACT," a conference focusing on the public health consequences of industrial migration and new trade agreements. March 18-20, Rutgers University, Piscataway, NJ. For more information contact: The Society for Occupational and Environmental Health (SOEH), 6728 Old McLean Village Dr., McLean, VA 22101. __________________________________________________ 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 __________________________________________________