TRADE NEWS BULLETIN Volume 2 Number 89 Thursday, May 20, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ MEXICO SPENDING MILLIONS LOBBYING NAFTA Mexico is expected to spend a total of $45 million on lobbying efforts in an attempt to win U.S. congressional approval of the North American Free Trade Agreement (NAFTA). Since the campaign began in 1991, Mexico's government and business leaders have hired at least 24 former U.S. officials to sell the trade pact, according to the WALL STREET JOURNAL. Mexican businessman Herman von Bertrab, who heads the campaign, coordinates lobbying efforts in Washington and is organizing a pro-NAFTA group in Mexico. According to the JOURNAL, U.S. public relations firms arrange speaking engagements for Mexican officials, law firms analyze specifics of the trade deal and its side accords, former government officials outline an overall strategy and congressional lobbyists work for approval on Capitol Hill. U.S. NAFTA supporters worry the Mexican campaign will backfire. "With Mexico hiring a large number of former officials, it can look like they're trying to buy the treaty," said Charles Lewis, executive director of the Center for Public Integrity, which tracks U.S. lobbying. Source: Bob Davis, "Mexico Mounts a Massive Lobbying Campaign to Sell North American Trade Accord in U.S.," WALL STREET JOURNAL, May 20, 1993. ________________________________________________________ CANADA WILL FIGHT ENFORCEMENT POWERS IN SIDE DEALS Canada warned that it will fight against the inclusion of enforcement rights in NAFTA supplemental agreements. A senior Canadian official said he is worried that sanction powers, currently being proposed by the United States to combat lax Mexican environmental and labor standards, will be used against Canada in the future. "We're worried about arming the United States with any capacity to take trade action against Canada," the official said. Under the existing U.S.-Canada Free Trade Agreement, Washington and Ottawa are free to apply their own trade laws in determining whether imports from the other country unfairly hurt domestic producers. Canadian trade negotiator David Murphy said during talks yesterday between the United States, Canada and Mexico that labor and environmental enforcement under NAFTA should be left up to each government rather than a trinational commission. "We need to build on the spirit of cooperation and mutual understanding instead," Murphy said. Sources: Drew Pagan, "Canada to Fight NAFTA Side Deals," REPORT ON BUSINESS, May 19, 1993; "NAFTA Negotiators Exchange Proposals on Side Deals," REUTER, May 19, 1993. ________________________________________________________ URUGUAY SAYS NO TO NAFTA, PRESSES FOR REGIONAL TRADE PACTS Uruguay plans to work through the economic details of its own regional trading pact, the Mercosur, before joining NAFTA. "We should approach this step-by-step. I think the integration movement mustn't go to the top at the beginning, from Alaska to Tierra del Fuego," said Luis Alberto Lacalle, president of Uruguay. The Mercosur, a trade group comprised of Uruguay, Argentina, Brazil and Paraguay, aims to eliminate internal trading blocks and impose a 20 percent common external tariff by January 1995. Lacalle said making Mercosur work has been "very difficult" and that Uruguay is far from joining the North American pact. The United States has invited Chile, Argentina and Venezuela to join NAFTA. According to Chile's leading Democratic presidential candidate, Chile may decide to join NAFTA if it is ratified. "The sooner a free trade agreement is signed with the U.S., the better for Chile," said Eduardo Frei. "Chile is open to the world and an agreement with the U.S. would be to our advantage ... We would advance in areas of investment, technological development, exports and the conquest of new markets." Sources: Stephen Fidler, "Uruguay Sees Regional Trend for Americas," FINANCIAL TIMES, May 20, 1993; "Leading Chile Presidential Candidate Wants NAFTA," REUTER, May 18, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ GATT OILSEED DEAL WOULD HURT AFRICA'S INDUSTRY A tariff reduction deal on oilseeds, as proposed under the General Agreement on Tariffs and Trade (GATT), could eliminate Africa's global market share for edible oilseeds. "If oilseed import duties are cut by more than 50 percent, not only will African countries disappear from the world edible oil market but their domestic industries will be hit as well," said Jean-Jacques Pesquet, a specialist for an EC-backed promoter of Third World products. Tariff cuts, planned under the current draft proposal of the Uruguay Round, would boost U.S. exports of oilseed to the European Community. Source: "GATT May Further Hit Africa's Oilseed Industry," REUTER, May 19, 1993. ________________________________________________________ Other Trade News ________________________________________________________ U.S. TRADE DEFICIT GREW, CLINTON TARGETS JAPAN The U.S. trade deficit grew by nearly 30 percent in March, rising to $10.2 billion, according to the latest report from the U.S. Commerce Department. Analysts say the increase, the largest in four years, was due to a surge of $4.37 billion worth of imported consumer goods. The Clinton Administration reacted to the poor trade numbers by targeting Japan, which now accounts for $5.3 billion of the trade deficit, nearly two-thirds of the total. "We must correct this imbalance," said Commerce Secretary Ron Brown. He said the United States will pressure Japan to increase purchases of U.S. goods and to remove "structural barriers" in Japan for specific U.S. products and services. Clinton is expected to present a negotiating agenda to Japanese officials next week when they meet for trade talks in Tokyo. Sources: Bob Davis, "Clinton Team to Suggest Import Goals For Japan as Trade Talks Approach," WALL STREET JOURNAL, May 20, 1993; Michael Prowse, "U.S. Trade Deficit Rises Sharply," FINANCIAL TIMES, May 20, 1993; Keith Bradsher, "U.S. Trade Deficit Surged in March," NEW YORK TIMES, May 20, 1993; Peter Behr, "U.S. Trade Deficit Grew Sharply in March," WASHINGTON POST, May 20, 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 ________________________________________________________