TRADE NEWS BULLETIN Volume II Number 60 Monday, April 5, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ U.S., CANADA RESOLVE LITTLE, MAY INCLUDE NAFTA IN FTA TALKS A long list of trade disputes between the U.S. and Canada were left unresolved last Friday, when U.S. Trade Representative Mickey Kantor met with Canadian Trade Minister Michael Wilson for the first time. The two officials discussed pending steel, beer, lumber and durum wheat disputes as part of an annual meeting required under the U.S.-Canada Free Trade Agreement (FTA). But they only managed to agree on the elimination of $800 million worth of tariffs on goods moving between the two countries. Kantor rejected a Canadian proposal to settle the binational steel dispute. "We continue to believe the multilateral steel negotiations are the most effective way to address these problems," said Kantor. Beer market disagreements were not ironed-out either, leaving the 10 cent environmental tax on U.S. canned beer exports to Canada, and increased warehousing costs for U.S. beer intact. Kantor hinted that the U.S. is running out of patience over trade disputes. "The summer is coming upon us, and that is the season where sales in this area are heightened," Kantor said. "We might be somewhat concerned about not reaching some conclusion before summer." Despite little success during their trade talks, Kantor and Wilson reaffirmed their support for the North American Free Trade Agreement (NAFTA). Both agreed to include supplemental accords in upcoming FTA meetings. "We trust we are going to reach a three- party conclusion on these supplements to the NAFTA in a reasonable time," Kantor said. Sources: Anne Swardson, "U.S.-Canada Trade Ties Often Tenuous," WASHINGTON POST FOREIGN SERVICE, April 2, 1993; Robert Kozak, "U.S., Canada Fail to Cool Off Bilateral Trade Disputes," REUTER, April 3, 1993. ________________________________________________________ MEXICAN ENVIRONMENTAL HAZARDS CONTINUE TO INCREASE According to government inspectors and environmentalists, the maquiladora region is still a mess of environmental hazards, despite Mexican President Carlos Salinas de Gortari's pledge to crack down on polluting industries. An official from Mexico's environmental protection agency said the government has doubled the number of environmental inspectors in Mexico from 250 to 500 over the past three months. But environmentalists claim that inspectors are unqualified. They cite a recent panel of government officials in Matamoros which included an architect, a veterinarian and a wildlife specialist. "The inspectors tend to be young people with very little training," said Al Rich, president of the Tijuana-based Western Maquiladora Trade Association. Environmentalists also contend that thousands of small businesses continue to violate newly established environmental laws out of ignorance or willfulness. "They (officials) are trying very hard to create the facade of enforcement without actually doing anything," charged Domingo Gonzalez, an environmental specialist with the Austin-based Texas Center for Policy Studies. Valentin Martin Contreras, owner of an agricultural chemicals company in Mexico, wants the government to play a more active role in educating businesses about new environmental laws and how to comply with them. As Salinas becomes more eager to secure U.S. congressional approval of the NAFTA, he will likely increase spending for clean-up along the U.S.-Mexico border. If Mexico's environmental hazards fail to be addressed it is possible that side accords on the environment could delay NAFTA's implementation, which is scheduled for January 1994. Sources: Tod Robberson, "Environmental Dilemma; Obstacles Abound to Enforcing Tough Laws to Clean Up Waste, " WASHINGTON POST FOREIGN SERVICE, April 4, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ DUNKEL SAYS NAFTA DEBATE IS BLOCKING GATT PROGRESS Arthur Dunkel, director-general of the General Agreement on Tariffs and Trade (GATT), accused the U.S. of slowing progress in world trade talks because of its preoccupation with NAFTA. Although Dunkel said he realized the Uruguay Round was still high on the U.S. agenda, he said, "If the officials of the USTR (U.S. Trade Representative) get to their office in the morning they generally have an urgent file on NAFTA which comes before the urgent file on GATT." However, Dunkel did agree NAFTA was "worth concluding," and recognized that the European Community (EC) has also contributed to the slow progress of GATT due to debate over economic integration for the past few years. Stephen Engelberg, acting chief of staff of USTR Mickey Kantor, denied Dunkel's accusations. "There is no strategy here to put off anything in terms of negotiations until the NAFTA is voted on," he said. Source: "Dunkel Says NAFTA Diverting U.S. From GATT," REUTER, April 5, 1993; Keith Bradsher, "GATT Chief Chides U.S. Over Pace," NEW YORK TIMES, April 5, 1993. ________________________________________________________ Resources: "Uruguay Round Negotiations In GATT And Related Trade Issues," No. 11, November 1992 - January 1993 by the International Coalition for Development Action (ICDA). A report focusing on the new political climate of trade talks under the Clinton Administration and how it will affect trade and the environment and regional integration/trading blocs. Included is a detailed look at the Multilateral Trade Organization (MTO). For information or a copy contact Myriam Vander Stichele, Trade Programme Coordinator, Rue Stevin 115, B-1040 Brussels. Tel: 32/2-230.04.30. Fax: 32/2- 230.03.48. ________________________________________________________ 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 ________________________________________________________