TRADE NEWS BULLETIN Volume II Number 52 Friday, March 19, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ NEGOTIATORS DIFFER ON NAFTA SIDE AGREEMENTS Negotiators from Mexico, the United States and Canada said they were satisfied with their first set of talks on drafting side agreements to the North American Free Trade Agreement, but they acknowledged that differences exist and that no substantive decisions had been made. The U.S. is seeking a plan that would allow international commissions to enact trade sanctions to enforce rules, but Canada and Mexico are balking at the idea. "We envision a rather novel and ground-breaking type of arrangement," a senior U.S. trade official said after the talks. "I'm not certain my two colleagues share that ambition yet. In addition, while each of the countries appears willing to discuss separate deals on labor and the environment, Canada and Mexico questioned the need for a side agreement dealing with import surges. They contend import protections are already provided in the NAFTA text and worry the U.S. would use such an accord to protect U.S. industries. "Whatever negotiations occur won't be an opening to protectionism," insisted Mexico's negotiator Herminio Blanco. The officials did agree not to reopen the NAFTA text itself despite growing pressure from Congress and labor and environment groups. U.S. Senator Donald Riegle (D-Michigan) recently sent a letter to President Bill Clinton expressing strong concerns about the pact. "NAFTA, as it currently stands, fails to promote fair trade or serve American interests in the areas of fair labor standards, environmental protection, and worker health and safety standards," said the letter, which was signed by 23 other senators. Riegle urged Clinton not to rush supplemental agreements in order to make a January 1, 1994 date to implement NAFTA. "We consider it far more important to develop an accord which serves U.S. interests than to force the agreement by an arbitrary date," Riegle wrote. NAFTA's staunchest supporters are now admitting the trade pact faces a tough battle before it is implemented. "NAFTA is in trouble," says Robert L. McNeil, executive vice-chairman of the pro-NAFTA, Emergency Committee for American Trade. According to an article in BUSINESS WEEK, the pact was in good shape when George Bush left office but is now on "life support." The magazine says that as more people have learned about NAFTA, opposition has grown, to the point that more than half of the American public is now against it. Talks on the side pacts will resume April 12 in Mexico City. Negotiators hope to meet every two weeks after that to reach a deal within two to three months. Sources: Martin Crutsinger, "Trade Talks," AP, March 18, 1993; Bob Davis, "U.S., Canada and Mexico Quickly Clash Over How to Put Teeth in Trade Pact," WALL STREET JOURNAL, March 19, 1993; "Negotiators Said to Agree NAFTA Won't Be Reopened," REUTER, March 18, 1993; Donald Riegle, LETTER TO PRESIDENT CLINTON, March 11, 1993; "NAFTA Isn't Out, But It Sure Is Down," BUSINESS WEEK, March 22, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ DELORS, CLINTON MEET - SANCTIONS STILL EXPECTED European Commission President Jacques Delors and U.S. President Bill Clinton met in Washington, DC, yesterday but they failed to head off U.S. sanctions threatened for Monday. Delors said he was worried that disputes on steel, aircraft and telecommunications could lead to a trade war and delay GATT talks. Delors said, "I remain concerned because my duty and my job is to convince each member of the community of the good consequences of the Uruguay Round and the retaliation measure that will be taken by the American administration is right against my job." The U.S. has threatened to ban EC firms from competing for a range of public utility contracts due to an EC directive, which it believes discriminates against U.S. firms. "I don't want a trade war with the EC and I don't think we'll have one," Clinton told reporters during a break in the meetings. Sources: Keith Bradsher, "On Trade, U.S. Partners Say, President Shows Two Faces," NEW YORK TIMES, March 19, 1993; Lyndsay Griffiths, "Clinton Sees No Trade War, Delors Remains Concerned," REUTER, March 18, 1993. ________________________________________________________ Other Trade News ________________________________________________________ CHILE DENIES RUSHING FREE TRADE WITH U.S. Chilean Finance Minister Alejandro Foxley denied next week's meeting with U.S. Finance Minister Lloyd Bentsen is intended solely as a means of speeding a free trade agreement between the two countries. "Chile has no urgency in signing a free trade pact with the U.S. because its own open (economic) policies have been successful," Foxley told reporters in Santiago Thursday. In addition to the free trade agreement, Foxley and Bentsen are expected to discuss Chile's debt reduction program and a multilateral investment fund. Source: "Chile Finance Minister to Meet U.S. Counterpart," REUTER, March 18, 1993. ________________________________________________________ Resources: MEXICO NEWSPAK and CENTRAL AMERICAN NEWSPAK are bi-weekly publications of the Documentation Exchange, a nonprofit information clearinghouse. U.S. subscription rate for each is $20 for six months, $38 for one year. PO Box 2327, Austin, Texas 78768. Tel: 512-476- 9841. Fax: 512-476-0130. ________________________________________________________ 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 ________________________________________________________