TRADE NEWS BULLETIN Volume 2 Number 91 Monday, May 24, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ U.S. SAYS DRUG TRAFFIC MAY INCREASE UNDER NAFTA Mexican cocaine smugglers are working with Colombian drug cartels to prepare for new opportunities under the North American Free Trade Agreement. According to a report written by an intelligence officer at the U.S. Embassy in Mexico City, the smugglers are establishing factories, warehouses and trucking companies in Mexico "as fronts for drug trafficking." The traffickers have also started buying maquiladora manufacturing and assembly plants for the same purpose. "The free-trade agreement makes the United States more accessible and convenient for traffickers," said a U.S. official. "It gives these people better opportunities to smuggle drugs." Gary Hufbauer, an economist who generally supports NAFTA, agreed that the increase in commerce would "provide a huge cover for drug traffickers." Already "most trucks that go through customs go through unimpeded," said Mike Lane, the deputy customs commissioner at El Paso. NAFTA would make it even more difficult to check incoming goods. Sources: Tim Weiner, Tim Golden, "Free-Trade Treaty May Widen Traffic in Drugs, U.S. Says," NEW YORK TIMES, May 24, 1993. ________________________________________________________ NEGOTIATIONS STALLED ON NAFTA SIDE DEALS Canada and Mexico are rejecting a U.S. plan to enforce international labor and environmental standards with sanctions. The issue emerged during three days of talks in Ottawa as one of the main stumbling blocks to completing NAFTA. In hopes of gaining Democratic support for the trade pact, the Clinton Administration proposed using trade sanctions as a final step to deal with continued violations of environmental and labor laws. U.S. negotiator Rufus Yerxa said the enforcement measures are needed to win approval from Congress, but Republican supporters of NAFTA are cautioning against insisting on strong enforcement provisions. Canadian trade negotiator John Weekes called the plan "too adversarial and too prosecutorial." Mexico says allowing sanctions would threaten its sovereignty. The dispute may force President Clinton to miss his self-imposed mid-July deadline to submit supplemental accords to Congress. Meanwhile, Ross Perot continues to criticize NAFTA. In a speech in Kansas City over the weekend, Perot said NAFTA would drive U.S. jobs to Mexico. "When you owe $4 trillion, you do not want to ship your tax base south," he said. Sources: Clyde H. Farnsworth, "3 Nations Disagree on Trade," NEW YORK TIMES, May 22, 1993; Peter Behr, "Sanctions Issue Leaves NAFTA Talks Stalled: Canada, Mexico Reject Side-Accord Proposal," WASHINGTON POST, May 22, 1993; Anthony Boadle, "Canada, Mexico Oppose U.S. Sanctions Plan in NAFTA," REUTER, May 21, 1993; "Perot," AP, May 24, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ DUNKEL CRITICAL OF U.S. TRADE POLICY The world trading system is in danger because larger countries are becoming protectionist and questioning the value of free trade, said Arthur Dunkel, General Agreement on Tariffs and Trade director- general. "We see, for example, attempts to impose domestic environmental or labor standards on other countries through trade measures, and attempts to open markets through bilateral pressure rather than in multilateral negotiation," Dunkel said in an address to the Pacific Basin Economic Council (PBEC) in Seoul, South Korea. He said if the Uruguay Round of GATT is not completed this year, it might never be finished. Dunkel appeared to take particular aim at the Clinton Administration. "Some of the politicians and officials who should be fighting for the open trading system that has made their societies more prosperous and more secure do not, because of the seductiveness of ideas of 'level playing fields', 'fair trade' or 'managed trade'." All three terms are often used by members of the Administration. More than 700 delegates from 24 nations are attending the three-day PBEC meeting, intended to foster closer economic and trade cooperation among Pacific Rim nations. In Seattle, Hugo Paemen, the European Community's chief negotiator, said he was fairly certain that a GATT accord could be reached by the end of the year. Paemen said he was confident France would accept the overall GATT package, despite its objections to the agriculture sections. The French government has indicated recently that it might accept an EC-U.S. agriculture deal if French farmers are given money for setting aside their land. Sources: "GATT Chief Dunkel Wags Finger at U.S. Over Trade," REUTER, May 23, 1993; "Dunkel Says China, Vietnam Positive Over GATT," May 24, 1993; "Dunkel Warns on Protectionism," FINANCIAL TIMES, May 24, 1993; "EC Trade Negotiator Sees Likely GATT Pact in '93," REUTER, May 21, 1993. ________________________________________________________ Events: June 5, 1993 "'Free' Trade or Fair Trade?" Unitarian Universalist Fellowship of Topeka. 4775 S.W. 21st Street, Topeka, Kansas. (913) 272-9233. A Prairie Green Conference on the North American Free Trade Agreement and what it would mean for the environment, labor, agriculture, and human rights. ________________________________________________________ Produced by: Kai Mander 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 ________________________________________________________