TRADE NEWS BULLETIN Volume 2 Number 90 Friday, May 21, 1993 ________________________________________________________ WEEK IN REVIEW May 17-20 ________________________________________________________ NAFTA News Summary ________________________________________________________ NEGOTIATORS MEET TO DRAFT SIDE ACCORDS Negotiators from the United States, Canada and Mexico meet today in Ottawa to conclude four days of trade talks aimed at drafting supplemental accords to the North American Free Trade Agreement (NAFTA). The United States continues to press for enforcement rights on labor and environmental standards in an attempt to win the support of congressional members and opposition groups. Canada and Mexico remain firmly opposed to the creation of a trinational commission empowered with sanction rights. A Canadian official warned on Tuesday that Canada will reject side accords that arm "the United States with any capacity to take trade action against Canada." Mexico has also threatened to reject side accords that include sanction rights, saying enforcement should be left up to individual governments while preserving sovereignty. Sources: L. Ryan and J. Maggs, "Negotiators Take Up NAFTA Side Accords," JOURNAL OF COMMERCE, May 19, 1993; D. Pagan, "Canada to Fight NAFTA Side Deals," REPORT ON BUSINESS, May 19, 1993. ________________________________________________________ CANADA CLOSE TO PASSING ORIGINAL NAFTA TEXT The Canadian Parliament is expected to pass the original NAFTA text soon, despite the lack of support from most Canadians. "Under our system of government (NAFTA approval) is virtually guaranteed," said Jeffrey Chisholm, the Bank of Montreal's vice chairman. Prime Minister Brian Mulroney's Conservative party has pushed hard to pass the NAFTA text through Parliament before Mulroney steps down this June. After being approved by a House of Commons Committee last week, the NAFTA text is now headed for its third and final stage of debate in Parliament. Once Parliament approves the text, it will then move to the Senate where it is expected to easily pass. But most Canadians aren't rallying behind the trade pact with full support, according to Chisholm. "Canadians just don't seem to be happy about foreign trade," Chisholm said. Canada-Mexico trade is currently $3 billion per year. Sources: C. Dunlap, "Canadian Parliament Approval of NAFTA Considered Assured," JOURNAL OF COMMERCE, May 19, 1993; "NAFTA Heads for Third and Final Reading," NEWSCAN, May 14, 1993. ________________________________________________________ MEXICO SPENDS MILLIONS TO WIN U.S. NAFTA SUPPORT The Mexican government, joined by business leaders, has launched what some call, the most organized and successful lobbying campaign in favor of NAFTA. According to the WALL STREET JOURNAL, the campaign has funded U.S. public relations firms, lawfirms, former government officials and lobbyists, to gain American approval of the trade pact. Mexican President Carlos Salinas de Gortari has planned a U.S. speaking tour next week in an attempt to stir up more NAFTA support. Salinas will begin his trip May 27, and plans to stop in Ann Arbor, New York City, Boston and Dallas. Sources claim Mexico has been spending an average of $15 million per year, since 1991, on the NAFTA campaign. The forceful Mexican campaign has caused some NAFTA supporters to worry it 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, an organization which tracks U.S. lobbying. Sources: B.Davis, "Mexico Mounts Massive Lobbying Campaign to Sell North American Trade Accord in U.S.," WALL STREET JOURNAL, May 20, 1993; "Mexico's President Salinas to Visit U.S.," REUTER, May 18, 1993. ________________________________________________________ USTR CRITICIZED FOR COALITION INVOLVEMENT, ANTI- NAFTA GROWS U.S. Trade Representative (USTR) Mickey Kantor was accused earlier this week of improperly organizing and publicizing a coalition of governors, mayors and state legislators in support of NAFTA. Representative Collin Peterson (D-Minnesota), chair of a House government operations sub-committee, said Kantor's involvement raises "serious questions about the potential ethical violations and possible criminal activities on the part of USTR officials and employees." Peterson, who leads an anti-NAFTA coalition in Congress, has asked the General Accounting Office to investigate the matter. A U.S. criminal code bans the use of any government money to influence members of Congress. Meanwhile, grassroots opposition groups have been lobbying hard to fight NAFTA. "Freshmen in the House are getting mail 30 to 1 against the NAFTA, with or without the side agreements," said a congressional staff director. Source: George Graham, Nancy Dunne, "Kantor in Firing Line for Excess Zeal on NAFTA," FINANCIAL TIMES, May 17, 1993; "Why NAFTA Will Pass," MEXICO REPORT, May 13, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ KANTOR URGES FAST-TRACK APPROVAL IN TIME FOR G-7 MEETING U.S. Trade Representative Mickey Kantor urged Congress to quickly extend the fast-track negotiating authority for the General Agreements on Tariffs and Trade (GATT) in time for the July summit of the Group of Seven (G-7) leaders of industrialized nations. "It is critical to have congressional approval of the fast track in advance of the G-7 meeting," Kantor said yesterday, addressing the Senate Finance Committee. Once fast-track is approved, Clinton would be able to present a concluded global agreement to Congress for a strict "yes" or "no" vote. Kantor believes that a quick fast-track approval would indicate to U.S. trade partners that it is serious about concluding the Uruguay Round of GATT talks by the December 15 deadline. Committee Chairman Senator Daniel Patrick Moynihan (D- New York) told Kantor that he would introduce fast-track legislation today. The United States, Canada, European Community and Japan have met several times already for preliminary talks before heading to the negotiating table in July. During talks last week in Toronto, Kantor said the four countries had made significant progress in producing a market access package, particularly for semiconductors and wood products. Kantor is expected to meet again with the other trade ministers at least twice before Tokyo talks. Sources: N. Dunne, "Clinton Wins 'Fast-Track' Backing," FINANCIAL TIMES, May 21, 1993; L. Griffiths, "Kantor Says Renewal of Fast- Track Trade Authority Critical," REUTER, May 20, 1993. ________________________________________________________ Resources ________________________________________________________ For copies of the following resources, contact the authors or organizations listed. 1. Robert Blecker and William E. Spriggs, "Manufacturing Employment In North America: Where the Jobs Have Gone," ECONOMIC POLICY INSTITUTE, October 1992. 16 pages. Economic Policy Institute, 1730 Rhode Island Ave., N.W. #200, Washington, D.C. 20036. Tel: (800) 537-9359. US$5.00. The authors find that from 1986 to 1990, manufacturing jobs in affiliates of U.S. multinationals in Mexico increased by almost 25%, while domestic manufacturing jobs increased by less than 1%. Moreover, contrary to what the Bush administration had us believe, the jobs which have been moving to Mexico are not low-wage jobs. Of the manufacturing jobs that have moved, 75% have been in industries where wages are either close to or well above average U.S. wage standards. 2. Jim C. Chen, "Appointments With Disaster: The Unconstitutionality of Binational Arbitral Review Under the United States-Canada Free Trade Agreement," WASHINGTON AND LEE LAW REVIEW, 1992:49:4. 45 pages. Washington and Lee Law Review, School of Law, Washington and Lee University, Lexington, VA, 24450. Tel: (703) 463-8566. US$6.00. The author believes that the U.S.-Canada FTA violates both Article III and the Appointments Clause of the U.S. Constitution. The FTA violates Article III by deviating from the recognized methods for exerting federal adjudicatory power. The FTA's procedures for choosing abitrators undermines procedures for the appointment of officers of the U.S. as well, despite the Appointments Clause of the Constitution. 3. Hilary F. French, "Costly Tradeoffs: Reconciling Trade and the Environment," WORLDWATCH PAPER 113, March 1993. 74 pages. Worldwatch Institute, 1776 Massachusetts Avenue, N.W., Washington, D.C. 20036-1904. US$5.00. Of particular importance is the author's analysis of global commodity trade. French concludes that halting the environmental toll of global commodity trade will require reforming the practice of "tariff escalation" while providing debt relief to those developing countries that have become self-destructively export-dependent. 4. INDINEGOUS KNOWLEDGE AND DEVELOPMENT MONITOR, Centre for International Research and Advisory Networks (CIRAN), 1993:1:1. 39 pages. CIRAN, P.O. Box 90734, 2509 LS The Hague, The Netherlands. FAX: +31-70-3510513. Free of charge for the three issues to be published in 1993. The Monitor is the newsletter of and for the international community of people who are interested in indigenous knowledge and the role that indigenous knowledge can play in participatory approaches to sustainable development. The first issue includes articles regarding indigenous sustainable agricultural practices and policy approaches to sustainable development. ________________________________________________________ Published by: Mark Ritchie The Institute for Agriculture and Trade Policy (IATP) Produced by: Gigi Boivin and Chirag Mehta 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 ________________________________________________________