TRADE NEWS BULLETIN Volume 2 Number 83 Wednesday, May 12, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ HOUSE ANTI-NAFTA CAUCUS FORMING CONGRESS DAILY reports that Representative Collin Peterson (D- Minnesota) will announce an anti-North American Free Trade Agreement caucus comprised of as many as 40 Democratic and Republican representatives. Peterson has been actively soliciting support from his colleagues in hopes of "providing rapid response" to congressional members and other groups touting NAFTA as a "win- win" situation. The group is intended to show unwavering opposition to NAFTA regardless of the outcome of supplemental agreements. The group was formed "because there were several like-minded members who believe that the NAFTA agreement cannot be fixed by side agreements," said a Peterson aide. The majority of the group believes President Bill Clinton should renegotiate NAFTA to address major problems in the areas of labor, the environment and agriculture. Source: "Peterson to Announce Formation of Anti-NAFTA Caucus," CONGRESS DAILY, May 5, 1993. ________________________________________________________ NAFTA THREATENS TO CATTLE INDUSTRY AND CONSUMERS Weaker inspection standards for Mexican cattle have led U.S. consumers, cattle ranchers and health officials to worry about the potential impact of the North American Free Trade Agreement (NAFTA). According to Karen Lehman, a senior fellow with the Institute for Agriculture and Trade Policy, the harmonization of health and sanitary standards under NAFTA will lower current U.S. food and safety regulations as imports increase. "Our current inspection system can't deal with the problems we have," said Lehman. Already, beef contaminated with tuberculosis (TB) is entering the U.S. from Mexico at an increasing rate. The number of beef carcasses found with TB in U.S. packing houses has more than doubled in recent years, from 266 cases in 1988 to 613 in 1992. Some experts blame the rise in TB infected cattle on U.S. and Mexican policy. "It is vital that trade agreements and procedures for entry be based on sound scientific data, not on someone's economic policy, not on a whim and not because someone can make some money doing this," said Robert Hillman, chairman of the TB committee of the U.S. Animal Health Association. Gary Weisbart, president of Agritech Inc., which owns a feedlot in Colorado, said his company had never had any significant problems with TB until two years ago when it started buying cattle raised in Mexican dairies. "Very frankly," said Weisbart, "we feel the inspection division of the USDA has not really done its job." While the National Cattlemen's Association (NCA) supports NAFTA, NCA Vice President Tom Cook said they do have some concerns with animal health and environmental food and safety standards. "We will not accept anything less from Mexico than what is required in this country," Cook said. He said the NCA likes the trade pact because it will remove duties on U.S. beef exports to Mexico, which he estimates will raise U.S. beef prices 50 cents to $1.00 over the next ten years. Sources: Amy Jo Brandel, "Beef Industry Pondering NAFTA's Impact," AGRI NEWS, May 6, 1993; "TB-Tainted Beef Raises New Questions About System," AGRI NEWS, May 6, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ HOUSE COMMITTEE APPROVES FAST-TRACK The U.S. House Ways and Means Committee approved an extension of the fast-track negotiating authority needed to conclude the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). If the full House and the Senate accept President Clinton's request to extend the fast-track, Clinton will have until December 15 to sign the final draft of the Uruguay Round. Congress would then have 120 days, until April 15, 1994, to vote "yes" or "no" on the trade pact. Clinton Administration officials said they feel confident that the current round will be completed by the April deadline. Source: "U.S. House Panel Extends GATT Fast-Track Authority," REUTER, May 11, 1993. ________________________________________________________ JAPAN CITES U.S. AS MAIN GATT VIOLATOR In its second annual "Report on Unfair Trade Policies," Japan criticizes the Clinton Administration's position that Japan's trade surplus can only be reduced by seeking measurable results in opening its markets to foreign products. Japan also accused the United States of committing the greatest number of global trade violations. The report says that if a trading partner has a complaint against Japan it should appeal to GATT rather than threaten to impose sanctions as the United States has done. A proposal last month by U.S. Commerce Secretary Ron Brown demanding "measurable results" through increased sales to Japan rather than reduced tariffs has sparked conflict between the two economic super-powers. "This (results-oriented) approach contains a basic flaw: namely, when trade has produced an undesirable result, a country will regard a policy or measure of its trading partner as having brought about that result, and therefore judge it as 'unfair,'" said an advisory panel to the Japanese Ministry of International Trade and Industry (MITI) in the report. "In fact current account and trade imbalances have very little, if any, correlation with unfair trade policies." Japan's global trade surplus for 1992/93 reached a record high of $136.1 billion. The report accused the United States of flawed trade policies in nine of twelve areas examined by MITI. The European Community was listed in six of 12 areas and South Korea was named in five areas. Canada and Australia were said to have almost no violations. The report called Hong Kong and Singapore "model free-trade economies." Sources: Jacob M. Schlesinger, "Japan Accuses U.S. of Unfair Trade Policies," WALL STREET JOURNAL, May 12, 1993; Andrew Pollack, "Look Inward, Tokyo Urges Trade Critics," NEW YORK TIMES, May 12, 1993; Paul Blustein, "Japan Favors Trade Rules Over Results," WASHINGTON POST, May 12, 1993; Michiyo Nakamoto, "Japan Mounts Offensive on Trading Rules," FINANCIAL TIMES, May 12, 1993; Linda Sieg, "Japan Hits Back at U.S., Others on Trade," REUTER, May 11, 1993. ________________________________________________________ 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 ________________________________________________________