TRADE NEWS BULLETIN Volume 2 Number 72 Monday, April 26, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ BORDER OFFICIALS VOICE STRONG SUPPORT FOR NAFTA Representatives from four southwestern U.S. border states and six Mexican states offered their "total support" for the North American Free Trade Agreement, declaring it would benefit the U.S., Mexico and Canada. "This support is based on the fact that NAFTA will raise the region's global efficiency, create more jobs in the three countries, increase the competitiveness of the three economies, improve the environment and promote well-being, prosperity and progress," said a statement issued Thursday as part of the 11th Conference of Governors of the U.S. - Mexican Border. The governors pressed for quick ratification of the trilateral trade pact, publicly urging negotiators to conclude discussions over supplemental accords on labor and the environment. "People in Mexico and New Mexico are quite concerned that the U.S. government may be dragging its feet on the NAFTA and may risk missing an important opportunity," said Albert Utton, a law professor at the University of New Mexico. Legal texts of the side accords will be put together by May 10, according to Canadian trade negotiator John Weekes. Sources: "U.S. and Mexican Officials Declare Support For NAFTA," UPI, April 23, 1993; "NAFTA Side Deals Readied," NEWSCAN, April 23, 1993; Christine Tierney, "Mexican, U.S. States Urge Swift NAFTA Ratification," REUTER, April 22, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ DOMINICA ADMITTED TO GATT - CHINA STILL PENDING The Commonwealth of Dominica became the 110th member of the General Agreement on Tariffs and Trade (GATT). The East Caribbean island, which imported a net $44 million worth of goods in 1991, relies on two main industries to support its economy: agriculture and tourism. Agriculture products include bananas, citrus fruits and coconuts. GATT has now accepted six new members this year with 11 applications pending, including one from China. China is expected to solicit more support for its application to GATT this week during its 12th meeting with the European Community. Beijing will try to ease economic tension over its large trade surplus with the EC in hopes of smoothing its entry to the world trade body. "We still need international understanding and support, including that of the EC," said Wu Yi, China's new minister of foreign trade and economic cooperation. China is also struggling to soften the U.S. attitude toward China's entry to GATT. China hopes that a warmer response from the EC will inspire similar feelings from the Americans, who have demanded more open markets from Beijing before accepting its membership to the world trade body. Sources: Tony Walker, "Beijing To Press For GATT Support," FINANCIAL TIMES, April 26, 1993; "Dominica Becomes 110th Member of GATT Trade Body," REUTER, April 23, 1993. ________________________________________________________ U.S. PUSHES FOR BILATERAL TRADE PACT WITH JAPAN The U.S. is proposing bilateral trade agreements for ceramics, semiconductors and computers with Japan in an attempt to narrow Japan's growing trade surplus with the U.S. Ron Brown, U.S. commerce secretary, said specific targets are needed to open the Japanese markets. "Markets will be considered open not when rules and regulations and arrangements change, but when we see that American products -- successful all over the world -- have an equal opportunity in Japan," said Brown. Although Japanese Prime Minister Kiichi Miyazawa agreed last week to launch more trade talks on the Structural Impediments Initiative (SII), he rejected Brown's call for "managed trade." The SII aims to remove trade and investment obstacles, and according to Miyazawa, will benefit both countries through cooperation in technology, the environment and trade. The British government warned that the future of free trade is in doubt if the U.S. pursues bilateral agreements to guarantee shares of specific products in foreign markets. "It is clearly unhelpful to the GATT world trade talks if countries as powerful as the U.S. and Japan go off and negotiate bilateral agreements," said UK Trade Minister Neil Hamilton in Tokyo. "It sets a very bad precedent which might encourage others to follow suit." Brown seemed determined to reach a deal similar to that formed in 1989 for U.S. semiconductors. "We are not looking for handouts," said Brown. "When we have not had a result-oriented approach, no progress has been made." Meanwhile, the head of the Japan New Party, Morihiro Hosokawa, told Tokyo business leaders that Japan needed to open its rice markets. "We should support the Uruguay Round and keep our markets open," Hosokawa said. He offered government support to farmers as a solution to agriculture concerns. "I'm not saying that we should sacrifice our rice farmers for the Uruguay Round, but we must find a middle ground where farmers could expect some help from the government," he said. The U.S. and other GATT members have pressured Japan to open its rice markets. Japan currently bans almost all imports of foreign rice. Sources: Charles Leadbeater, "UK Warns U.S. Against Bilateral Trade Accords," FINANCIAL TIMES, April 26, 1993; Irene Kunii, "Liberal Party Head Favors Opening Japan Markets," REUTER, April 26, 1993; "Miyazawa Rejects U.S. Call to Set Trade Targets," UPI, April 23, 1993; Lyndsay Griffiths, "U.S. Commerce Chief Warns Japan - Trade Fight Ahead," REUTER, April 23, 1993; Linda Sieg, "Brown Downplays Clinton Yen Comment, Targets Trade," REUTER, April 23, 1993. ________________________________________________________ Events: The Canadian Association for the Study of International Development (CASID) 9th Annual Conference "RESCUING DEVELOPMENT, TAMING THE MARKET, AND BUILDING COMMUNITY" June 7-9, 1993, Carleton University, Ottawa, Ontario. For more information contact: Roy Culpeper, Secretary-Treasurer, CASID, c/o The North-South Institute, 55 Murray Street, Suite 200, Ottawa, Ontario KlN 5M3. Tel: (613) 236-3535. Fax: (613) 237-7435. ________________________________________________________ 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 ________________________________________________________