TRADE NEWS BULLETIN Volume II Number 58 Thursday, April 1, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ REALTORS ANTICIPATE NAFTA DEMANDS, RUSH TO ENTER MARKET The North American Free Trade Agreement (NAFTA) is expected to increase demand for Mexican real estate as U.S. and Canadian companies expand operations in Mexico. The demand will affect Mexico City the most, where more than 1,800 of the 2,800 U.S. companies active in Mexico have offices. "Demand growth in the office sector is enormous and in the industrial sector it's ten times worse," said Mark Robertson of Cushman & Wakefield/GCI. "We have an old corporate client base in the United States that was demanding service." RE/Max International Inc. expects to have 100 franchise locations by the end of the year. Century 21 Real Estate Corp. has opened approximately 70 offices in Mexico over the past year. Office space in Mexico City averages about $55 a square foot compared to roughly $30 a square foot in New York City. Already 18,000 people in Mexico profess to work in the real estate business, and the number is expected to climb under NAFTA. Currently there are no licenses and little regulation to enforce market standards on companies claiming to sell real-estate and office services. Source: Charles W. Thurston, "Realtors Rush to Grab Piece of Mexico Mart," JOURNAL OF COMMERCE, March 29, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ U.S. RELEASES TRADE SURVEY RESULTS, JAPAN MAIN OFFENDER The office of U.S. Trade Representative Mickey Kantor released results of its annual survey of international trading practices, concluding that 44 countries currently impose discriminatory tariffs and barriers to U.S. trade. The 275-page report identified Japan and the European Community as the top two offenders. Historically the survey has been used to claim progress and identify areas likely to be given future investigative priority. In Europe, Kantor said the findings will "facilitate the achievement of the Administration's overall trade policy objective, which is to expand trade through market-opening measures backed by rigorous enforcement of U.S. laws." Administration officials did not say specifically how the report will affect U.S. trade policy or GATT negotiations, but it could ultimately lead to trade sanctions. The 27-page section on Japan was twice as long as last year's report. Offenses ranged from insurance and other financial services to motorcycles, coal, wine and certain metals. Most of these goods were mentioned for the first time. Ira Wolf, head of the agency's Japan and China desk said, "We tried to be more comprehensive." The U.S. held a $49.4 billion trade deficit with Japan last year, and maintained a surplus with the EC of $8.8 billion. "The United Stated is not innocent either on the subject of trade barriers," said EC spokeswoman Ella Krucoff. The EC will publish its detailed annual report of U.S. barriers sometime in April. The U.S. also warned trading partners yesterday to start playing by the rules on intellectual property rights (IPR). "We are actively involved right now in the IPR question," said Ira Shapiro, general counsel to the U.S. Trade Representative. The department will release a complete list of IPR offenders on April 30, when President Clinton is expected to announce his "priority list" of trade hot spots. The U.S. has long argued for greater protection of U.S. innovations in a wide range of goods and services. Sources: Robert D. Hershey Jr., "U.S. Trade Survey Calls Japan Most Restrictive," NEW YORK TIMES, April 1, 1993; Lyndsay Griffiths, "U.S. Warns of Crackdown on Countries That Steal American Ideas," REUTER, March 31, 1993; Martin Crutsinger, "Trade Barriers," AP, March 31, 1993. ________________________________________________________ G7 TO DISCUSS GATT CONCLUSION AT TOKYO SUMMIT The next meeting of Group of Seven (G7) leaders will convene in Tokyo this July with a GATT conclusion again high on the agenda. "It would hardly be possible to allow the next summit ... to pass without settlement of this issue," said German Foreign Minister Klaus Kinkel. The G7 includes Britain, France, the U.S., Canada, Japan, Italy and Germany. Kinkel hinted that Germany's patience with France over GATT issues is wearing thin. "We're trying to make our influence felt on France, to make them realize that they have to make some contribution if a successful conclusion is to be reached," Kinkel said. According to France' new Prime Minister, Edouard Balladur, the government agrees that the G7 should be used to elevate trade negotiations above U.S.-EC disputes. French farm leaders are confident the new government will pay closer attention to their concerns about last fall's U.S.-EC farm deal. "At the international level (of GATT talks) we're counting on the government's determination," said Luc Guyau, head of the FNSEA farmers federation. Indications from the government reveal this may very well be the case. An adviser to Balladur said the government will seek a high-level review of GATT negotiations to underscore western Europe's unique position in liberalizing trade. New Agriculture Minister Jean Puech said, "My task will be ... an active, permanent and vigorous defense of our agricultural and maritime interests, in GATT as well as Brussels." Source: "G7 July Summit Must Settle GATT," REUTER, March 31, 1993; Juliette Rouillon, "French Farmers Trust New Government to be Firm on GATT," REUTER, March 31, 1993; David Buchan, "French Doubts on GATT Fall Short of Poll Rhetoric," FINANCIAL TIMES, March 31, 1993. ________________________________________________________ Resources: "The North American Environment: Opportunities for Trinational Cooperation by Canada, the United States and Mexico," a report summarizing results and recommendations from a recent colloquium looking at establishing an environmental agenda for NAFTA. For information contact: The North American Institute, 128 Grant Avenue, Suite 106, Santa Fe, NM, 87501. Tel: 505-982-3657. Fax: 505-983-5840. ________________________________________________________ Events: April 7th 2:30-4:30. The University of Minnesota Law School will sponsor a dialogue on GATT, the Multilateral Trading Organization (MTO), international legal agreements and the dispute settlement system. Seating is limited. Contact Mary Jane Luedtke for more information. Tel: (612) 625-7540. ________________________________________________________ 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 ________________________________________________________